presented below is information related to sanford corp 572521

July 1

Sanford Corp. sold to Léger 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 Rothschild Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company.

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

Léger 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.)