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4. Crater Company factored with recourse P2,000,000 of accounts receivable with a bank. The finance charge is 5% and 10% was retained to cover sales

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4. Crater Company factored with recourse P2,000,000 of accounts receivable with a bank. The finance charge is 5% and 10% was retained to cover sales discounts, sales returns and sales allowances. The transaction met the condition to be considered as sale but subject to recourse for nonpayment. The factor estimated the recourse obligation at P50,000. What total amount should be recognized initially as loss on factoring

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