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:

Giffen Good

A product that experiences an increase in demand as its price rises, contrary to standard economic theory, due to its role as a staple good.

Income Increases

A situation where an individual's or household's earnings rise, leading to potential changes in spending behavior.

Utility Maximizing

The economic principle that individuals or firms seek to achieve the highest level of satisfaction or profit from their consumption or production choices.

Budget Constraint

The limit on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.