E-commerce
Merchant Cash Advance — Drawdown
Receiving a lump-sum advance against future sales revenue from a fintech lender.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Bank | Asset (+) | 20,000.00 | - |
| Merchant Cash Advance Payable | Liability (+) | - | 23,000.00 |
| Unearned Discount (Finance Cost) | Contra-Liability (+) | 3,000.00 | - |
💡 Accountant's Note
Merchant cash advances charge a factor rate (e.g., 1.15x) on the amount advanced. The total repayable ($23,000) is the liability; the $3,000 cost is a finance charge amortized as repayments are made.
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