ABC Co Sold $80,000 of Accounts Receivable to First Bank and and Incurred

question 16

Essay

ABC Co. sold $80,000 of accounts receivable to First Bank and incurred a 2% factoring fee. Prepare the journal entry for ABC Co. to record the sale.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a particular market.

Long Run

A period in economic analysis where all factors of production and costs are variable, allowing full adjustment to changes.

Weekly Operating Profits

Weekly operating profits describe the earnings a business generates from its normal operations over a one-week period, excluding any income from investments or other non-operational sources.

Short Run

An interval in economic studies where a minimum of one production element remains constant and is unalterable.