On May 1, 2020, Sheffield Co. factored accounts receivable of $400,000 to ABC Financial. The transfer was made with recourse. Records are transferred to ABC Financial who will receive all collections.

ABC remits to Sheffield 85% of the factored receivables. ABC retains 15% to cover its factoring fee (8%), which is paid at the beginning of the contract, and to provide a cushion against potential sales returns, allowances and discounts. Sheffield estimates that 4% of the factored accounts receivable will be uncollectible.

On June 19, 2020, Sheffield and ABC talk and determine that Sheffield had sales returns of $18,000. All but $8,500 of the A/R was collected.

What journal entry does Sheffield need to make to record the sale of the A/R?