Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 5% factoring fee. What entry should Jervis make on to record the transaction?

Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000

Debit Accounts Receivable $71,250; debit Factoring Fee Expense $3,750; credit Cash $75,000

Debit Cash $75,000; credit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000

Debit Cash $71,250; credit Accounts Receivable $71,250

Debit Accounts Receivable $75,000; credit Factoring Fee Expense $3,750; credit Cash $71,250