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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?

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

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