Presented below are two independent situations.
(a) On March 3, Hinckley Appliances sells $620,000 of its receivables to Universal Factors Inc. Universal Factors assesses a finance charge of 3% of the amount of receivables sold. Prepare the entry on Hinckley Appliances' books to record the sale of the receivables.
(b) On May 10, Cody Company sold merchandise for $3,500 and accepted the customer's America Bank MasterCard. America Bank charges a 5% service charge for credit card sales. Prepare the entry on Cody Company's books to record the sale of merchandise.