Vaughn corporation factors $275,100 of accounts receivable with kathleen battle financing, inc. on a with recourse basis. kathleen battle financing will collect the receivables. the receivables records are transferred to kathleen battle financing on august 15, 2020. kathleen battle financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.

assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. prepare the journal entry on august 15, 2020, for vaughn to record the sale of receivables, assuming the recourse obligation has a fair value of $3,670. (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when the amount is entered. do not indent manually.)