View Policies Current Attempt in Progress On December 1, 2022, Peartastic, Inc. assigns $2,000,000 of its accounts receivable to Fourth National Bank as collateral for a $1,200,000 note. The bank assesses a finance charge of 1% of the receivables assigned and interest on the note of 6%. Prepare the December 1 journal entries for both Peartastic and Fourth National (Credit account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Date December 1 December 11 Account Titles and Explanation Peartastic, Inc. Fourth National Bank eTextbook and Media Debit Credit

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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.  

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The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.