On October 1, 2017, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank

Question:

On October 1, 2017, Alpha Inc. assigns $3 million of its to Alberta Provincial Bank as collateral for a $2.6-million loan evidenced by a note. The bank's charges are as follows: a finance charge of 4% of the assigned receivables and an interest charge of 10% on the loan. Prepare the October 1 journal entries for both Alpha and Alberta Provincial Bank.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...