A company factored $35,000 of its accounts receivable and was charged a 2% factoring fee.The journal entry to record this transaction would include a debit to Cash of $35,000,a debit to Factoring Fee Expense of $700,and a credit to Accounts Receivable of $35,700.

Question

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The debit to Cash should be $34,300, not $35,000, because the factoring fee of $700 is deducted from the cash received.

A Company Factored $35,000 of Its Accounts Receivable and Was