A company factored $45,000 of its accounts receivable and was charged a 3% factoring fee. The journal entry to record this transaction would include a:
A. Debit to Cash of $43,650, a debit to Factoring Fee Expense of $1350, and a credit to Accounts Receivable of $45,000.
B. Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
C. Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.
D. Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1350, and a credit to Accounts Receivable of $43,650.
E. Debit to Cash of $46,350 and a credit to Accounts Receivable of $46,350.
Answer: A
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What will be an ideal response?
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