Answer:
The journal entries are shown below:
Explanation:
Cash $149,040
Due from factor $11,592 ($165,600 × 3%)
Loss on sale of receivables $4,968 ($165,600 × 3%)
To Account receivable $165,600
(Being the factoring of account receivable is recorded)
Account receivable $165,600
To Due from factor $11,592 ($165,600 × 3%)
To Cash $149,040
To Gain on sale of receivables $4,968 ($165,600 × 3%)
(Being the factoring of account receivable is recorded)
Only these entries are passed
