On December 1,2016,General Mole borrowed $400,000 at 12% interest and pledged $500,000 in accounts receivable as collateral.Additionally,General Mole was charged a finance fee equal to 1% of the accounts receivable assigned.At the end of December,$300,000 of the assigned receivables were collected and remitted to the lender along with accrued interest.
Required:
Prepare journal entries to record the borrowing,the assignment of receivables,the collection on the receivables,and the recognition of interest expense.

Question

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The Answer of On December 1,2016,General Mole borrowed $400,000 at 12% interest and pledged $500,000 in accounts receivable as collateral.Additionally,General Mole was charged a finance fee equal to 1% of the accounts receivable assigned.At the end of December,$300,000 of the assigned receivables were collected and remitted to the lender along with accrued interest.
Required:
Prepare journal entries to record the borrowing,the assignment of receivables,the collection on the receivables,and the recognition of interest expense.

On December 1,2016,General Mole Borrowed $400,000 at 12% Interest and Pledged