FACTORING ACCOUNTS RECEIVABLE On February 1, Fotis Company factored $80,000 of accounts receivable without recourse with Fast Finance Company on a notification basis. Fast Finance charged a factoring fee of 3% of the amount of receivables factored. To cover sales returns and allowances. Fast Finance withheld 5% of the amount of receivables factored.

Instructions

Prepare the necessary journal entry for Fotis on February 1.