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A company factors $300,000 of accounts receivable on a with recourse basis. The recourse provision has a fair value of $2,500. The factor retains 5%
A company factors $300,000 of accounts receivable on a with recourse basis. The recourse provision has a fair value of $2,500. The factor retains 5% of the receivables to cover possible future sales discounts, returns, and allowances, and assesses a finance charge of 1.5% of the receivables. What amount of loss should the company recognize on this transaction? a. $2,500 b. $4,500 c. $7,000 d. $15,000
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