Problems $8-10$ Balance sheet effects of collateralized borrowing versus factoring $($LO $8-6)$

Needham Corporation has a $$200,000$ balloon mortgage payment due in early August. To meet its obligation, it decided on August $1$ to accelerate collection of accounts receivable by assigning $$260,000$ of specified accounts to a commercial lender as collateral for a loan. Under the agreement, Needham guarantees the accounts and will notify its customers to make their payments directly to the lender. In return, the lender advances to Needham $85\%$ of the accounts assigned. The remaining $15\%$ will be paid to Needham once the commercial lender has recovered its fees and related cash advances. The lender receives a fee of $5\%$ of the total accounts assigned, which is immediately deducted from the initial cash advance. The lender also assesses a monthly finance charge of one$-$half of $1\%$ on any uncollected balances. Finance charges are to be deducted from the first payment due Needham after the lender has recovered its cash advances. On August $31,$ Needham received a statement from the lender saying it had collected $$160,000.$ On September $30,$ Needham received a check from the lender with a second statement saying it has collected an additional $$80,000.$

Required:

$1-$Prepare all necessary journal entries made by Needham.

$2-$Show the balance sheet presentation of the assigned accounts receivable and any related liabilities at August $31.$

$3-$Prepare all necessary journal entries made by Needham assuming these changes in the given scenario:

a$-$The transaction qualifies under U$.$S$.$ GAAP as a sale with recourse.

b$-$The assessed monthly finance charge increases the Loss on sale of receivables account and is offset by a credit to Due from factor.

c$-$Although Needham has guaranteed the transferred accounts, their high quality makes nonpayment unlikely.

Complete this question by entering your answers in the tabs below.

Required $1$

Prepare all necessary journal entries made by Needham. $($If no entry is required for a particular transaction, select $"$No journal entry required" in the first account field.$)$

$1-$Record the entry for the loan by assigning accounts receivable as collateral. $($August $01)$

$2-$Record the entry as a result of the collection of accounts receivable by the lender. $($August $31)$

$3-$Record the entry to accrue interest at the end of the month. $($August $31)$

$4-$Record the entry for the final settlement of the loan and assigned receivables. $($September $30)$

Required $2$

Complete this question by entering your answers in the tabs below.

Show the balance sheet presentation of the assigned accounts receivable and any related liabilities at August $31.$

Accounts receivableLoan payableInterest payable

Required $3$

Journal entry worksheet

$1-$Record the entry cash received on accounts receivable after set$-$off of due on factor and loss on sales of receivable. $($August $01)$

$2-$Record the entry loss on sale of receivables and due from factor. $($August $31)$

$3-$Record the entry cash received on due from factor net off of loss on sales receivables. $($September $30)$