Jervis sells $3400 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 2% factoring fee. What entry should Jervis make to record the transaction?
A. Debit Accounts Receivable $3332; debit Factoring Fee Expense $68; credit Cash $3400.
B. Debit Cash $3332; credit Accounts Receivable $3332
C. Debit Cash $3400; credit Factoring Fee Expense $68; credit Accounts Receivable $3400
D. Debit Accounts Receivable $3400; credit Factoring Fee Expense $68; credit Cash $3332
E. Debit Cash $3332; debit Factoring Fee Expense $68; credit Accounts Receivable $3400
Answer: E
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