Presented here are two independent situations.
(a) On March 3, Hinckley Appliances sells $580,000 of its receivables to Marsh Factors; Inc. Marsh Factors assesses a finance charge of 3 percent 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 $3,800 and accepted the customer’s Allstar Bank MasterCard. At the end of the day, the Allstar Bank MasterCard receipts were deposited in the company’s bank account. Allstar Bank charges a 4 percent service charge for credit-card sales. Prepare the entry on Cody Company’s books to record the sale of merchandise.