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The bank assesses a finance charge of 2 of receivables

Question - On October 1, 2014, Chung, Inc. assigns $1,106,200 of its accounts receivable to Seneca National Bank as collateral for a $748,400 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9%.

Prepare the October 1 journal entries for both Chung and Seneca.

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Accounting Basics: The bank assesses a finance charge of 2 of receivables

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