Problem 3 Kajol company factors 1K 300000 of account receivable on a without recourse basis on July 1, 2008 e receivable records are transferred to Uttara finance, which will rece the collection. Uttara finance assesses a finance charge of 1.5% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discount, returns and allowances. The transaction is to be recorded as a sale. Required:

(a) Prepare the journal entry on July-1. 2008 for Kajol company to record the sale of receivable without recourse.

(b) Prepare the journal entry on july-1, 2008 for Uttara finance to record the purchase of receivable without recourse.