1. On April 22nd, Blue Company purchased inventory from Calistoga Corporation and and received an invoice in the amount of $5,000 with payment terms of 3/10, n/30. Blue uses the net method to record purchases. Blue should record this purchase at:

$5,000.

$4,850.

$2,425.

$5,150.

2.Harvey Hotels is planning to borrow $50,000 from East-West Bank. The bank has asked Harvey to pledge their accounts receivable as collateral for a loan. This will require Harvey to:

None of these answer choices are correct.

Report the receivables net of the borrowed amount.

Disclose the arrangement in notes to the financial statements.

Remove of the pledged receivables from current assets and including them with noncurrent investments.