Jervis sells $3,400 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 2% factoring fee. What entry should Jervis make to record the transaction?

Multiple Choice

• Debit Cash $3,332; credit Accounts Receivable $3,332

• Debit Accounts Receivable $3,332; debit Factoring Fee Expense $68; credit Cash $3,400.

• Debit Cash $3,332; debit Factoring Fee Expense $68; credit Accounts Receivable $3,400

• Debit Cash $3,400; credit Factoring Fee Expense $68; credit Accounts Receivable $3,400

• Debit Accounts Receivable $3,400; credit Factoring Fee Expense $68; credit Cash $3,332