What would be recorded as a gain on transfer of receivables

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Problem 1: Sun Inc. factors P 2,000,000 of its accounts receivables without guarantee (recourse) for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded as a gain (loss) on the transfer of receivables?

a. Loss of P100,000

b. Gain of P100,000

c. Loss of P300,000

d. Loss of P200,000

 

Reference no: EM132817553

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