Recording a secured borrowing

On April 1, NYC Corporation secures a loan from a finance company, using its accounts receivable of $25,000 as collateral for the loan. NYC Corporation agrees to remit customer collections as payments on the loan. Loan proceeds are 80% of the receivables less a 2% finance charge on the balance of the assigned receivables. In addition, the finance company charges 10% interest on the unpaid loan balance, payable at the end of each month. Record the April 1 entry for NYC Corporation.

On April 1, NYC Corporation secures a loan from a finance company, using its accounts receivable oi collections as payments on the loan. Loan proceeds are 80% of the receivables less a 2% finance cha charges 10% interest on the unpaid loan balance, payable at the end of each month. Record the Apri an from a finance co in proceeds are 80% balance, payable at