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Sun Inc. factors $6,000,000 of its accounts receivables without recourse for a finance charge of 5%. The finance company retains an amount equal to 10%
Sun Inc. factors $6,000,000 of its accounts receivables without recourse for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded as a gain (loss) on the transfer of receivables?
- Loss of $230,000
- Gain of $530,000
- Loss of $1,130,000
- Loss of $300,000
How is the answer $300,000?
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