Kanye West needs cash so he sells $100,000 of Accounts Receivable with recourse. He is charged a 5 percent commission by the factor and estimates the fair value of the recourse liability to equal $6,000. He receives $80,000 in cash on the day of the sale. What total expense does Kanye West record related to the sale?

Kanye West needs cash so he sells $100,000 of Accounts Receivable with recourse. He is charged a 5 percent commission by the factor and estimates the fair value of the recourse liability to equal $6,000. He receives $80,000 in cash on the day of the sale. What total expense does Kanye West record related to the sale?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 22P

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