In December 2016, Bay Watch Company factored accounts receivable that had a book value of $500,000 to Spirit Bank, with recourse and estimates the fair value of the recourse obligation to be $10,000. Under the arrangement, Bay Watch transfers the $500,000 receivables to Klein, and Klein will remit 80% of the factored amount to Bay Watch in cash. Klein will retain the remaining 20% to cover its factoring fee (equal to 8% of the factored amount), and to provide a cushion against potential sales returns and allowances. After Klein has collected cash equal to the amount advanced to Bay Watch plus their factoring fee, Klein will remit the excess to Bay Watch. Under this arrangement, Klein provides Bay Watch with cash up-front and a “beneficial interest” in the transferred receivables equal to the fair value of the last 20% of the receivables to be collected (which management estimates to be $82,000) less the 8% factoring fee. Provide the journal entry for Bay Watch to record this transaction.