Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 5% factoring fee. What entry should Jervis make to record the transaction?
A) Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable
$75,000
B) Debit Accounts Receivable $71,250; debit Factoring Fee Expense $3,750; credit Cash
$75,000
C) Debit Cash $75,000; credit Factoring Fee Expense $3,750; credit Accounts Receivable
$75,000
D) Debit Cash $71,250; credit Accounts Receivable $71,250
E) Debit Accounts Receivable $75,000; credit Factoring Fee Expense $3,750; credit Cash
$71,250
A) Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable
$75,000
Explanation: Factoring fee expense: $75,000 * .05 = $3,750
Cash received: $75,000 - $3,750 = $71,250
You might also like to view...
Vegan Company reported the following: Common stock, $5 par, 200,000 shares authorized, 50,000 shares issued and outstanding What is the effect of issuing 2,000 shares of common stock in exchange for land with valued by a realtor at $36,000 if the common stock sells for $12 per share and is regularly traded?
a. The Land account increases by $24,000. b. Retained Earnings decreases by $10,000. c. Common Stock increases by $36,000. d. Additional Paid-in Capital - Common increases by $24,000.
Consumers are less price sensitive ________
A) to high cost items B) when they frequently change their buying habits C) when there are more substitutes D) when there are more competitors E) when they do not readily notice higher prices
The starting point in developing a budget based on zero-based budgeting is _____
a. last year's budget b. zero c. a competitor's budget d. the budgeted expense amount that maximizes profits
Which of the following practices is recommended for an effective business presentation?
A. Introducing key ideas toward the end of the body of the presentation B. Avoiding graphs and charts in the presentation C. Citing trusted sources, specific data, and expert quotations D. Avoiding specific examples and vivid comparisons