$7\mathrm{.}5$ Other Issues

On June $1,2020,$ Van Art Snack Foods assigns $$1,400,000$ of its accounts receivable to First National Bank as collateral for a $$1,000,000$ note. First National Bank assesses a finance charge of $1$ percent of the accounts receivable and interest on the note of $12$ percent. Which of the following is correct regarding this transaction?

First National Bank will credit Interest Revenue for $$14,000$ on June $1,2020.$

First National Bank will credit Due from Factor for $$20,000$ on June $1,2020.$

First National Bank will credit Gain on Purchase of Receivables for $$34,000$ on June $1,2020.$

First National Bank has purchased the receivables from Van Art Snack Foods.

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