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6. (7 points) Wood Incorporated factored $300,000 of accounts receivable with Engram Factors Inc. on a without recourse basis6. (7 points)Wood Incorporated factored $300,000 of accounts receivable with Engram Factors Inc. on a without recourse basis. Engram assesses a 3.50% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments.Prepare the journal entry for Wood to record the sale. Also, record the journal entry for Engram Factors, Inc. to record the purchase of the receivables

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Wood Inc journal entry

Cash 268,500
Due from factor (300,000*7%) 21,000
Loss on sale of receivables (300,000*3.5%) 10,500
Accounts Receivable 300,000

Engram Inc journal entry

Accounts Receivable 300,000
Due from factor 21,000
Finance revenue 10,500
Cash 268,500
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