Trevino Company has decided to factor its accounts receivable in order to get the immediatereceipt of cash. The journal entry to record the factoring of the receivables would include:

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When a company factors its accounts receivable, it typically receives cash (debit to Cash), incurs a financing expense due to the fees charged by the factoring company (debit to Financing Expense), and removes the factored receivables from its books (credit to Accounts Receivable).

Trevino Company Has Decided to Factor Its Accounts Receivable in Order