1-Jul

Sanford   Corp. sold to Legler Co. merchandise having a sales price of $10,000 with   terms 2/10, net/60. Sanford records its sales and receivables net.

5

Accounts   receivable of $12,000 (gross) are factored with Rothchild Credit Corp.   without recourse at a financing charge of 9%. Cash is received for the proceeds;   collections are handled by the fi nance company. (These accounts were all   past the discount period.)

9

Specific   accounts receivable of $9,000 (gross) are pledged to Rather Credit Corp. as   security for a loan of $6,000 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

Legler   Co. notifies Sanford that it is bankrupt and will pay only 10% 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.)