Nikos Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2008, it assigned, under guarantee, specific accounts amounting to $100,000. The finance company advanced to Nikos 80% of the accounts assigned (20% of the total to be withheld until the finance company has made its full recovery), less a finance charge of 1⁄2% of the total accounts assigned.

On July 31 Nikos Company received a statement that the finance company had collected $55,000 of these accounts and had made an additional charge of ½% of the total accounts outstanding as of July 31. This charge is to be deducted at the time of the first remittance due Nikos Company from the finance company.

On August 31, 2008, Nikos Company received a second statement from the finance company, together with a check for the amount due. The statement indicated that the finance company had collected an additional $30,000 and had made a further charge of 1⁄2% of the balance outstanding as of August 31.

Instructions

Make all entries on the books of Nikos Company that are involved in the transactions above.