Question

On April 1 of the current year, Troubled Company factored receivables with a carrying value of $85,000 for $60,000 in cash from Scrooge Lenders. The transfer was made without recourse. On April 1, Troubled would:
a. Credit deferred interest expense for $25,000.
b. Credit factored accounts receivable for $85,000.
c. Debit discount on liability for $25,000.
d. Debit loss on sale of receivables for $25,000.

Answer 1

Answer:

B

Explanation:

See attached file