Jervis sells $3100 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 $3038; debit Factoring Fee Expense $62; credit Cash $3100.
B. Debit Cash $3038; debit Factoring Fee Expense $62; credit Accounts Receivable $3100
C. Debit Accounts Receivable $3100; credit Factoring Fee Expense $62; credit Cash $3038
D. Debit Cash $3038; credit Accounts Receivable $3038
E. Debit Cash $3100; credit Factoring Fee Expense $62; credit Accounts Receivable $3100
Answer: B
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