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  3. a crest textiles factors 540,000 of accounts recei

A Crest Textiles factors 540,000 of accounts receivable on a with recourse basis. The Factor...

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Accounting

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A Crest Textiles factors 540,000 of accounts receivable on a with recourse basis. The Factor agrees to provide financing based on these receivables, but imposes a 10% one-time fee. In addition, the transferor and transferee agree that $3,000 of sales returns and allowances (adjustments) can be expected from these accounts. Further, Crest Textiles determines that this recourse obligation has a fair value of $5,000. What is the loss or expense to be recorded by the transferor

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