Jervis sells $2,700 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 4% factoring fee. What entry should Jervis make to record the transaction?

Multiple Choice

• Debit Accounts Receivable $2,700; credit Factoring Fee Expense $108; credit Cash $2,592

• Debit Cash $2,592; credit Accounts Receivable $2,592

• Debit Accounts Receivable $2,592; debit Factoring Fee Expense $108; credit Cash $2,700.

• Debit Cash $2,592; debit Factoring Fee Expense $108; credit Accounts Receivable $2,700

• Debit Cash $2,700; credit Factoring Fee Expense $108; credit Accounts Receivable $2,700