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On November 30, 2023, Niyazova Corporation secured a loan with Yana Finance Company using its accounts receivable of $80,000 as collateral for the loan. Niyazova agrees to remit customer collections as payment on the loan. Loan proceeds are 85% of the receivables less a $1,500 flat-fee finance charge. In addition, Yana charges 12% interest on the unpaid balance of the loan, payable at the end of each month.

1. Is this a pledging, assigning, factoring, or securitizing transaction? Explain briefly.

2. Record the receipt of the loan proceeds.

3. By the end of December, Niyazova collected $46,000 cash on $50,000 of the assigned accounts, less $3,000 sales returns (previously recorded as a refund liability) and $1,000 sales discounts. Give the journal entries to record the collections of the accounts receivable and the payment to Yana.

4. In January 2024, $2,000 of the accounts receivable are written off as uncollectible (the original $80,000 of receivables is included in the normal bad debt estimation process). Also another $25,000 is collected on account. Give the entry needed to account for the write-off and collection.

5. Give the journal entry to record the loan being fully paid off (including all interest accumulated) on January 31, 2024.

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