Sun Inc. factors $3,000,000 of its accounts receivables with recourse for a finance charge of 3%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. Sun estimates the fair value of the recourse liability at $150,000. What would be recorded as a gain (loss) on the transfer of receivables?
A) Gain of $90,000.
B) Loss of 240,000.
C) Gain of $540,000.
D) Loss of $150,000.
Correct Answer:
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