On October 1, 2010, Brosnan Company sells (factors) $400,000 of receivables to Nation Factors, Inc. Nation assesses a service charge of 3% of the amount of receivables sold. The journal entry to record the sale by Brosnan will include:
A) a debit of $400,000 to Accounts Receivable.
B) a credit of $412,000 to Cash.
C) a debit of $412,000 to Cash.
D) a debit of $12,000 to Service Charge Expense.
Correct Answer:
Verified
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