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Sagot :
Tricon Co. sells $10,000 of its accounts receivables and is charged a 5% factoring fee. It records this sale with a debit to Cash for $9,500.
What is a factoring fee?
The factoring fee is a kind of discount in which it includes factoring companies that are received by the companies after purchasing invoices before they are due and the debtors are to be paid.
One can easily calculate it with the help of the formula. They just have to put the data in the formula. It's like:
Factoring fee = daily rate * number of days the invoice is outstanding
Thus, sale with a debit to Cash for $9,500.
Learn more about factoring fee from here:
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