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A Company Sells $900,000 of Accounts Receivable to a Factor

Question 28

Multiple Choice

A company sells $900,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a


A) debit to Interest Expense for $18,000.
B) debit to Cash for $882,000.
C) debit to Service Charge Expense for $18,000.
D) credit to Accounts Receivable for $900,000.

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