Asked by
Gurpreet Singh
on Dec 16, 2024
Verified
On October 1 2016 Beane Company sells (factors) $600000 of receivables to Milago Factors Inc. Milago assesses a service charge of 4% of the amount of receivables sold. The journal entry to record the sale by Beane will include
A) a debit of $600000 to Accounts Receivable.
B) a credit of $624000 to Cash.
C) a debit of $624000 to Cash.
D) a debit of $24000 to Service Charge Expense.
Service Charge Expense
Costs charged to customers for services provided, including fees for maintenance, support, or other service-related activities.
Accounts Receivable
Money owed to a business by its clients for goods or services provided on credit.
- Understand the outcomes associated with the sale of receivables to a factor, including the management of service charges.
Verified Answer
JK
Learning Objectives
- Understand the outcomes associated with the sale of receivables to a factor, including the management of service charges.