Sheffield Inc. transferred $703,000 of its accounts receivable to Independent Trust on Nov 1, 2020, receiving 96% of the receivables balance as proceeds. The agreement specified that the receivables would become the property of Independent Trust, and Independent could manage the receivables or resell them as it wished. In addition, the agreement specified that Sheffield would have no right to repurchase the receivables from Independent, and included a recourse provision with an estimated value of $17,400.

1. Does this transaction meet the requirements to be treated as a sale of receivables?

2. Calculate the loss on disposal of receivables.

3. Prepare a journal entry to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit