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On March 1, 2018 the Santa Teresa Glass Company borrowed $600,000 from Finance Bank and...

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Accounting

On March 1, 2018 the Santa Teresa Glass Company borrowed $600,000 from Finance Bank and signed a promissory note. Interest at 8% is paid monthly. The company assigned $800,000 of its receivable as collateral for the loan. Fiance Bank charges a finance fee equal to 2.0% of the account receivable assigned. On March 31, 2018 Santa Teresa Glass Company collected $500,000.

1. Prepare the general journal entry required on March 1, 2018.

2. Prepare the entries at March 31, 2018 to reflect money collected and remitted to Finance Bank.

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