A company pledges accounts receivable as security for a loan. The company shall: a. Create a counter Accounts receivable account. This account will be called Pledged accounts receivable and will have credit balance. b. It will debit the Pledged accounts receivable account and credit Accounts receivable. c. Will debit Cash and credit Accounts receivable d. None of the above

17. A promissory note receivable (Note receivable) whose principal is $10,000, has a duration of 120 days and its annual interest rate is 12% will generate interest after 120 days for the amount of: a. $1,200 b. $394.50 c. $400d $3,945 18. A company sold its accounts receivable with recourse. An account(s) that must appear in the journal entry to record the sale of accounts receivable will be: a. Loss on sale of receivables b. Recourse liability c. both accounts d. neither account