Question: Uzi Inc. assigns $ 5 , 0 0 0 , 0 0 0 of its accounts receivables as collateral for a $ 2 million 8

Uzi Inc. assigns $5,000,000 of its accounts receivables as collateral for a $2 million 8% loan with a bank. Uzi Inc. also pays a finance fee of 2% on the accounts receivables. What would be recorded as a gain (loss) on sale of receivables?
A. Loss of $50,000.
B. Loss of $400,000.
C. Loss of $40,000.
D.
$0- no loss on sale of receivables is recorded.

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