What would be the journal entry to record this transaction accounting homework help

Sunland Company assigns $4530000 of its accounts receivables as collateral for a $2.97 million loan with a bank. The bank assesses a 4% finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction?

A.	Debit Cash for $2851200, debit Interest Expense for $118800, and credit Accounts Receivable for $2970000.

B.	Debit Cash for $2003000, debit Interest Expense for $118800, debit Due from Bank for $1560000, and credit Accounts Receivable for $4530000.

C.	Debit Cash for $2673000, debit Interest Expense for $297000, and credit Notes Payable for $2970000.

D.	Debit Cash for $2851200, debit Interest Expense for $118800, and credit Notes Payable for $2970000.

 

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