Prepare journal entries for Lott Co. for:
(1) Accounts receivable in the amount of $1,000,000 were assigned to ABC Finance by Safety Co. as security for a loan of $850,000. ABC Finance charged a 3% commission on the accounts; the interest rate on the note is 12%.
(2) During the first month, Safety Co. collected $400,000 on assigned accounts after deducting $900 of discounts. Safety Co. wrote off a $1,060 assigned account.
(3) Safety Co.paid to ABC Finance the amount collected plus one month's interest on the note.
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