Presented below is information related to Vaughn Corp., which sells merchandise with terms 2/10, net 60. Vaughn Corp. records its sales and receivables net.

9		Specific accounts receivable of $14,800 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,400 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.)
Dec. 29		Warren Harding Co. notifies Vaughn that it is bankrupt and will pay only 20% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.) Prepare all necessary entries in general journal form for Vaughn Corp