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DRB, Inc. enters into an arrangement with Genius Enterprises whereby Genius will purchase $200,000 of DRB's receivables and charge a 6% fee. As part of
DRB, Inc. enters into an arrangement with Genius Enterprises whereby Genius will purchase $200,000 of DRB's receivables and charge a 6% fee. As part of the agreement, Genius will retain $20,000 as additional security. DRB sold the receivable with recourse obligation, estimated to be $3,000. The 6% fee will be paid at the start of the factoring arrangement. Prepare the journal entry to record the agreement assuming that the sale criteria are met. Multiple Choice Cash Loss on sale of receivables Accounts receivable 180,000 20,000 200,000 O Cash Loss on sale of receivables Receivable from factor Recourse liability Accounts receivable 180,000 9,000 14,000 3,000 200,000 Cash Loss on sale of receivables Receivable from factor Accounts receivble 174,000 6,000 20,000 200,000 Cash Loss on sale of receivables Receivable from factor Recourse liability Arrinte rerolunkle 174,000 9,000 20.000 3,000 2nnnnn
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