Problem:
Arness Woodcrafters sells $250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts receivable. Arness estimates the fair value of the recourse liability to be $8,000.
Required:
Question: Prepare the journal entry for Arness to record the sale.
Note: Please provide reasons to support your answer.