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What effect does borrowing the money on assets

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Question - On 7/1/20 XYZ Merchandising assigns $500,000 of receivables as collateral for a $400,000 loan. The bank that provides the loan assesses a finance charge of 1.5% of the assigned receivables. The note has an annual interest rate of 9%. What effect (if any) does borrowing the money on 7/1/20 have on the assets, liabilities, and equity of XYZ Merchandising (do not provide the journal entry in your answer)?

Reference no: EM132867288

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