Peggy Is in the Business of Factoring Accounts Receivable

Peggy is in the business of factoring accounts receivable.Last year,she purchased a $30,000 account receivable for $25,000.This year,the account was settled for $18,000.How much loss can Peggy deduct and in which year?

A) $5,000 for the current year.
B) $5,000 for the prior year and $7,000 for the current year.
C) $7,000 for the current year.
D) $12,000 for the current year.
E) None of the above.