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The unadjusted trial balance of Mane Corporation on December 31, 2023 included the following: Debit Credit Accounts receivable $175,000 Allowance for doubtful accounts 3,000 Sales

The unadjusted trial balance of Mane Corporation on December 31, 2023 included the following:

Debit Credit

Accounts receivable $175,000

Allowance for doubtful accounts 3,000

Sales revenue $4,200,000

Sales returns and allowances 60,000

On January 1, 2024, Mane sold $110,000 of its accounts receivable to Neo Incorporated on a with recourse basis. Neo assessed a 5% finance charge of the balance of accounts receivable and retained an amount equal to 10% of accounts receivable for possible adjustments.

Required

Prepare the fiscal 2023 year-end adjusting journal entry assuming that the estimate of uncollectible accounts is determined by taking 3% of gross accounts receivable. You must provide a detailed calculation of the amount. Journal entry description is not required.

Prepare the journal entries for Mane AND Neo to record the sale of the accounts receivable to Neo, assuming that the recourse liability had a fair value of $7,000. You must provide detailed calculations of amounts. Journal entry description is not required.

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