Problem 2

On September 1, 2020, Rayhak Company assigned specific receivables totaling to P750,000 to Pak Bank as a collateral on a P625,000, 12% loan. Pak Bank will collect the assigned accounts receivable. The bank also assessed a 2% service charge on the total accounts receivable assigned. Collections of assigned accounts during September 2020 totaled P260,000 gross of cash discounts amounting to P3,500. Prepare all the journal entries relating to the problem for the month of September 2020. (Books of Rayhak