Question
Jervis sells $4,400 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 4% factoring fee. What entry
Jervis sells $4,400 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 on to record the transaction? |
a Debit Accounts Receivable $4,400; credit Cash $4,400.
b Debit Cash $4,400; credit Accounts Receivable $4,400.
c Debit Cash $4,576; credit Factoring Fee Expense $176; credit Accounts Receivable $4,400.
d Debit Cash $4,224; debit Factoring Fee Expense $176; credit Accounts Receivable $4,400.
e Credit Cash $4,224; credit Factoring Fee Expense $176; debit Accounts Receivable $4,400.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started