A serial communication peripheral device operates both as a conventional modem and to transmit and receive facsimile images as scan encoded data. Text data containing ASCII characters can be received from a local device and converted into scan encoded data for transmission to facsimile machines or other computers. The text to facsimile conversion process uses an image builder to produce a partial image of a line of text. The partial image is stored in a buffer with each character at regularly spaced intervals. The desired intercharacter spacing and attributes such as bold and expanded characters are stored in an attribute array with each element of the array corresponding to one of the character images in the buffer. A Modified Huffman compressor scans the image buffer and produces the scan encoded data based upon the detected bits and the attributes stored in the attribute array.