Earth Company assigned P3,000,000 of accounts receivable as collateral for a P2,000,000 loan with a bank. The bank assessed a 4% finance fee and charged 6% interest on the note at maturity. What would be the journal entry to record the transaction?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 26Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer...
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Earth Company assigned P3,000,000 of accounts receivable as collateral for a P2,000,000 loan with a bank. The bank assessed a 4% finance fee and charged 6% interest on the note at maturity.

What would be the journal entry to record the transaction?

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