A company factored $38,000 of its accounts receivable and was charged a 1% factoring fee. The journal entry to record this transaction would include a:
A. Debit to Cash of $38,000 and a credit to Accounts Receivable of $38,000.
B. Debit to Cash of $38,380 and a credit to Accounts Receivable of $38,380.
C. Debit to Cash of $37,620, a debit to Factoring Fee Expense of $380, and a credit to Accounts Receivable of $38,000.
D. Debit to Cash of $38,000, a credit to Factoring Fee Expense of $380, and a credit to Accounts Receivable of $37,620.
E. Debit to Cash of $38,000 and a credit to Notes Payable of $38,000.
Answer: C
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