2. Initrode Company pledges $125,000 of its customer receivables to DC Corp as security for a loan. DC Corp lends Initrode $110,000 in return and charges a 3% finance fee for this service.

A. Show the journal entry made by Initrode.

B. Describe the different effects on each of the financial statements that a secured borrowing like this one has, as oppose to a sale of the receivables in Question 2.