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2. Factoring (sale) of Accounts Receivable: Santee Co. factored $60,000 of its accounts receivable with...

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2. Factoring (sale) of Accounts Receivable: Santee Co. factored $60,000 of its accounts receivable with recourse to Commercial Finance Co. Commercial Finance reserved an amount equal to 10% of the factored receivables to cover potential adjustments for sales returns and allowance, and charged a 5% commission on the gross amount of the receivables. All conditions for a sale have been met. The fair value of recourse obligation is estimated to be $1,000. Required (10 points): Prepare the journal entries for Santee Co. to record the following: a. The sale of the receivables. b. Sales Returns and Allowances of $1,600 occurred on the factored accounts receivable. The company chooses to record the sales returns as they occur. c. There is no further sales return and allowance from the customer. Santee Co. received the remaining amount from Commercial Finance Co

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