Question

jervis sells 3400 of its accounts receivable to northern bank in order to obtain necessary cash northern bank charges a 2% factoring fee what entry should jervis make to record the transaction

Answer 1

Factoring fee = 2% * Account Receivable

= 2% * $3,400

= $68

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Date Account Titles and Explanation Debit Credit

Cash $3,332

Factoring expenses $68

Account receivables $3,400

(To record the receipt of cash against the receivables)