Question

Peggy is in the business of factoring accounts receivable. Last year, she purchased a $30,000 account receivable for $25,000. This year, the account was settled for $25,000. How much loss can Peggy deduct and in which year?
a. $5,000 for the prior year.
b. $10,000 for the current year.
c. $5,000 for the prior year and $5,000 for the current year.
d. $5,000 for the current year.
e. None of these choices are correct.

Answer 1

Answer:

e. None of these.