On December 15,2017,The Dutton Company Factored $1,600,000 of Accounts Receivable

On December 15,2017,The Dutton Company factored $1,600,000 of accounts receivable for proceeds of $1,500,000.The company recorded the transaction as being without recourse,with $100,000 recorded to interest expense.During the preparation of the financial statements dated December 31,2018,staff concluded that the factoring arrangement should have been classified as being with recourse.Additional information about the factoring is as follows:
The factor withheld $40,000 for potential uncollectible accounts.Actual uncollectible accounts amounted to $50,000; Dutton paid the additional $10,000 to the factor on August 7,2018 and recorded this amount as "miscellaneous expense."
Required:
1.Reproduce the incorrect journal entry that was recorded on December 15,2017,and on August 7,2018.
2.Provide the correct journal entries that should have been recorded on December 15,2017,and on August 7,2018.
3.Record any correcting journal entries necessary to correct the error in Dutton's accounts.

Correct Answer:

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a.Incorrect entry:
_TB1321_00_TB1321_00...

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