ABC Incorporated sold $271,000 of accounts receivable to Best Factors Inc. on a with recourse basis. Best Factors assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Assume the recourse liability has a fair value of $14,000.

What would ABC Incorporated record as a gain or loss on the transfer of receivables?

Gain of $5,420

Gain of $19,420

Loss of $5,420

Loss of $19,420