On June 30, 2018, Blondie Fixtures was considering alternatives to bolster its cash position. Option One called for transferring $440,000 in accounts receivable to Dogwood Finance Companywithout recoursefor a 4% fee. Option Two calls for Blondie to transfer the $440,000 in receivables to Dogwoodwith recourse. Dogwood's charges a 3% fee for receivables factored with recourse. Option Two meets the conditions to be considered a sale, but Blondie estimates a $3,400 recourse liability. Under either option, Dogwood will immediately remit 90% of the factored receivables to Blondie, and retain 10%. When Dogwood collects the remaining receivables, it remits the amount, less the fee, to Blondie. Blondie estimates that the fair value of the final 10% of the receivables is $27,000 (ignoring the factoring fee).

Required:

1.Prepare any necessary journal entry or entries if receivables are factored under Option One.

2.Prepare any necessary journal entry or entries if receivables are factored under Option Two.