Q Co. sells $20,000 of accounts receivable to a factor without recourse. The factor charges a...
Q Co. sells $20,000 of accounts receivable to a factor without recourse. The factor charges a 15% fee. Which of the following journal entries would be made to record the sale of these receivables?
A. Cash 17,000
Factored Accounts Receivable 20,000
Accounts Receivable 20,000
Notes Payable 17,000
B. Cash 17,000
Loss on Sale of Receivables 3,000
Accounts Receivable 20,000
C. Cash 17,000
Loss on Sale of Receivables 3,000
Sales 20,000
D. Cash 20,000
Interest Expense 3,000
Accounts Receivable 20,000
Due to Factor 3,000
Homework Answers
| Accounts | Debit | Credit |
| Cash | 17000 | |
| Loss on sale of receivables (20000*15%) | 3000 | |
| Accounts receivable | 20000 |
Option b. is correct answer.
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