The controller for Ayayai Corporation has reached an agreement with Whispering Winds Financing Ltd. to sell a large portion of Ayayai's past-due accounts receivable. Ayayai agrees to sell $1,800,000 of accounts receivable to Whispering Windswith recourse. Ayayai's controller estimates that the fair value of Ayayai's liability to pay Whispering Winds for uncollectible accounts is $161,000. Whispering Winds will charge Ayayai 7% of the total receivables balance as a financing fee and will withhold an initial amount of 8%.

Calculate the net proceeds and the gain or loss on the disposal of receivables to Whispering Winds Financing Ltd.

Prepare the journal entry on the books of Ayayai Corporation to record the disposal of receivables to Whispering Winds Financing Ltd.