On August 1, Best company assigned $320,000 of its accounts receciable to Key Bank as collateral for a $260,000 loan by issuing a note. Best will continue to collect the receviables. Key Bank assesses a finance charge of 2% of the assigned accounts receviable, and charges 12% interest annually on the outstanding loan balance. By August 31, Best had collected $200,000 and remitted this amount plus the interest to date on August 31 to Key Bank.

Required: Prepare journal entries to record the above transactions on Best's General Journal.