Papa Company factored 99,999.99 of its accounts receivable to Mama Company for 84,999.99. An allowance for bad debts equal to 2,999.99 was previously established for the account factored Mama Company withheld 4.99% of the purchase price as protection against sales return and allowance.

The sale of receivable is with recourse and the recourse obligation has an estimated value of P5,000.

Questions:

1. Determine the cash received.

2. Loss on factoring.

3. Journal entry to record the transaction.