Question
Jervis sells $4,500 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 3% factoring fee. What entry
Jervis sells $4,500 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 3% factoring fee. What entry should Jervis make to record the transaction?
A. Debit Accounts Receivable $4,500; credit Factoring Fee Expense $135; credit Cash $4,365 | ||
B. Debit Cash $4,500; credit Factoring Fee Expense $135; credit Accounts Receivable $4,500 | ||
C. Debit Cash $4,365; debit Factoring Fee Expense $135; credit Accounts Receivable $4,500 | ||
D. Debit Accounts Receivable $4,365; debit Factoring Fee Expense $135; credit Cash $4,500. | ||
E.Debit Cash $4,365; credit Accounts Receivable $4,365 |
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