Hello,
I have 2 clients in 2021 who used a factoring company, in which they sold a portion of their future A/R and received the money upfront. In one case, they sold $437,500 of future receivables at a purchase price of $350,000, of which $3,500 was the origination fee. So, in essence, they paid $437,500 for $346,500. Since this is not your traditional A/R factoring, how do I account for this transaction on the books? Please note that this is not a loan and no particular set of invoices was taken into account in terms of A/R. I am completely lost.