Business Finance
What would be the journal entry to record this transaction, accounting homework help- |
Sunland Company assigns $4530000 of its accounts receivables as collateral for a $2.97 million loan with a bank. The bank assesses a 4% finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction?
A.
Debit Cash for $2851200, debit Interest Expense for $118800, and credit Ac
counts Receivable for $2970000.
B.
Debit Cash for $2003000, debit Interest Expense for $118800, debit Due from Bank for $1560000, and credit Accounts Receivable for $4530000.
C.
Debit Cash for $2673000, debit Interest Expense for $297000, and credit Notes Payable for $2970000.
D.
Debit Cash for $2851200, debit Interest Expense for $118800, and credit Notes Payable for $2970000.
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