What amount of loss on factoring should be recognized

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Reference no: EM132699124

Question - Mabuhay Inc. sold its accounts receivable (net realizable value, P260,000) for cash 230,000. Ten percent of the proceeds was withheld by the factor to allow possible customer returns and other account adjustments. The related allowance for bad debts is 40,000.

Required -

1. What amount of loss on factoring should be recognized?

2. What is the entry to record the factoring of accounts receivable?

Reference no: EM132699124

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