a. The journal entry to be prepared on September 1 is as follows: Cash [Debit] = $960,000Accounts Receivable [Debit] = $40,000Finance Charge Expense [Debit] = $40,000[Credit] Recourse Liability = $1,000,000*0.02 = $20,000[Credit] Revenue (Gain on Sale) = $20,000 The total accounts receivable factored is $1,000,000. The 4% finance charge is $40,000, which is withheld by Marks Financing. The 2% allowance for sales discounts is $20,000 ($1,000,000 x 0.02). The remainder ($960,000) is remitted to Global Company. The recourse liability is set up for the amount of the sales discounts that may have to be returned to Marks Financing if any of the accounts receivable are not collected. The revenue (gain on sale) is calculated as follows: Total finance charge - sales discounts = $40,000 - $20,000 = $20,000. b. The journal entry to be prepared on September 1 on Global Company's book is as follows: Cash [Debit] = $940,000Due from Factor (Recourse) [Debit] = $60,000Loss on Sale of Receivables [Debit] = $20,000Accounts Receivable [Credit] = $1,000,000The amount of cash received by Global Company is $960,000 ($1,000,000 - $40,000), which is offset by a due from factor account for $60,000 ($1,000,000 x 0.06). If any accounts receivable are not collected, Global Company would be responsible for returning the recourse liability to Marks Financing. As a result, a loss on the sale of receivables is recorded for the amount of the sales discounts and the recourse liability. The journal entry is summarized below: Global Company's book: [Debit] Cash = $940,000[Debit] Due from Factor (Recourse) = $60,000[Debit] Loss on Sale of Receivables = $20,000[Credit] Accounts Receivable = $1,000,000