Accounts receivable without recourse

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Mission Company factors $40,000 of accounts receivable without recourse. The factor agrees to provide financing based on these receivables, but imposes a 10% fee. In addition, the transferor and transferee agree that there will probably be $3,000 of sales returns and allowances that can be expected from these accounts.

Required

1. Record the journal entry that Mission Company will record for the factoring of the A/R.

Reference no: EM131295017

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