On 7/1/X1 Miller photography borrows $700,000 from M&B Bank. as part of the agreement, miller assigns $800,000 of specific AR as collateral. if the loan is not paid, M&B has the right to convert the AR to cad(take control of it and collect AR). Miller will continue to collect AR. At the end of the month, Miller will remit the amount of AR collected plus 6% interest on the unpaid balance back to M&B, which is the prevailing rate for firms as credit worthy as Miller. M&B charges 2% of the assigned AR as a finance charge.

Assume cash collections during July equal $160,000 and cash collections during August equal $100,000. prepare any journal entries to record the remittance of august's cash collections to the bank.