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Sun Inc. factors $6,000,000 of its accounts receivables WITH recourse for a finance charge of 3%. The finance company retains an amount equal to 10%
Sun Inc. factors $6,000,000 of its accounts receivables WITH recourse for a finance charge of 3%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. Sun estimates the fair value of the recourse liability at $300,000. What would be recorded as a gain (loss) on the transfer of receivables?
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Loss of $480,000. |
Loss of $300,000. |
Gain of $1,080,000. |
Gain of $180,000. |
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