A firm factors $40,000 of accounts receivable without recourse. The factor agrees to provide financing based on these receivables, but imposes a 10% fee. In addition, the transferor and transferee agree that $3,000 of sales returns and allowances can be expected from these accounts. What is the loss or expense to recorded by the transferor?

a. $7,000
b. $4,000
c. $3,000
d. $0


B

Business

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