Southern Textiles decides to sell ($ 700,000) of its accounts receivable to First Central Factors Inc. First

Question:

Southern Textiles decides to sell $\$ 700,000$ of its accounts receivable to First Central Factors Inc. First Central Factors assesses a service charge of $2 \%$ of the amount of receivables sold. Prepare the journal entry that Southern Textiles makes to record this sale.

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