Prepare the Necessary Journal Entry for the Following Transaction

question 204

Essay

Prepare the necessary journal entry for the following transaction. Francis Company sold $200,000 of its accounts receivables to a factor. The factor charges a 3% fee.

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Definitions:

Least Expensive

The option that requires the lowest financial outlay or cost.

Mode of Transportation

Different methods by which goods and services are moved from one location to another, such as by truck, train, ship, or airplane.

Private Fleet

A company-owned set of vehicles that are used for the transport of goods and materials for the company’s own operations, as opposed to relying on third-party carriers.

Milk Runs

A delivery method where a single vehicle collects loads from several suppliers, reducing transportation costs and improving efficiency.