On October 1, 2010, Katy Songs Company sells (factors) $400,000 of receivables to Nation Factors, Inc. Nation assesses a service charge of 3% of the amount of receivables sold. The journal entry to record the sale by Katy Songs Company will include:

	a.	a debit of $400,000 to Accounts Receivable.
	b.	a credit of $412,000 to Cash.
	c.	a debit of $412,000 to Cash.
	d.	a debit of $12,000 to Service Charge Expense.