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| Taylored Corp. factors $200,000 of accounts receivable in a transaction in which control is surrendered and without recourse to Rich Corp. on July 1, year 1. Rich assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Rich charged 15% interest computed on a weighted-average time to maturity of the receivables of 41 days. Which of the following statements is correct? A. Taylored should record a liability of $10,000 related to the holdback. B. Taylored should remove all of the receivables from the books by crediting AR by $200,000. C. Taylored should remove the receivables without any holdback from the books by crediting AR by $190,000. D. Taylored should record a liability on factoring of AR of $200,000. |