Answer
On November 1, 2012, Moresan should credit Accounts Receivable for the amount of trade accounts receivable factored, debit Cash account for the amount received from the factor, debit a Receivable from Factor for 5% of the trade accounts receivable factored, and debit Loss on Sale of Receivables for 3% of the trade accounts receivable factored.
Work Step by Step
The above should be done been the trade accounts receivable were factored on a without recourse basis, the factor is responsible for collection.
