A Company sold $40,000 of its accounts receivable and was charged a 3.5% factoring fee. How should the company record this transaction in the journal?

Cash	40,000
Factoring Fee Expense		1,400
Account Receivable		38,600

Cash	38,600
Factoring Fee Expense	1,400
Account Receivable		40,000

Cash	40,000
Account Receivable		40,000

Account Receivable	38,600
Factoring Fee Expense	1,400
Cash		40,000

Account Receivable	40,000
Factoring Fee Expense		1,400
Cash		38,600