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Pearl Incorporated factored $125,500 of accounts receivable with Martinez Factors Inc. on a without-recourse basis. Martinez assesses a 2% finance charge of the amount of
Pearl Incorporated factored $125,500 of accounts receivable with Martinez Factors Inc. on a without-recourse basis. Martinez assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Pearl Incorporated and Martinez Factors to record the factoring of the accounts receivable to Martinez. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit Pearl 1. Cash Due from Factor Loss on Sale of Receivables Accounts Receivable Martinez ONE III, DITA 2. Accounts Receivable Due to Customer Sales Revenue Cash
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