please explain due from factor and due to customer, why is the amount retained and what does it mean by probable adjustments?

hd sales allowances. Gateway to the Profession To illustrate, Crest Textiles, Inc. factors $500,000 of accounts receivable with Co mercial Factors, Inc, on a without recourse basis. Crest Textiles transfers th records to Commercial Factors, which will receive the collections. Commercial Factors an amount equal to 5 percent of the accounts receivable (for probable adjustments). ables transferred without recourse. ve of Sale without Recourse a finance charge of 3 percent of the amount of accounts receivable and retains LLUSTRATION 7-18 Crest Textiles and Commercial Factors make the following journal entries for the receiv- Entries for Sale of Receivables without ecourse Crest Textiles, Inc. Commercial Factors, Inc. Cash Due from Factor Loss on Sale of Receivables 460,000 Accounts (Notes) Receivable 500,000 25,000 15,000" Due to Customer (Crest Textiles) Interest Revenue Cash 15,000 460,000 Accounts (Notes) Receivable "(S%xS500,000) ..(3%. S5000001 500,000