Tidal Company has significant amounts of trade accounts receivable. In March of this year, Tidal assigned specific trade accounts receivable to Herb Finance Company on a with-recourse, nonnotification basis as collateral for a loan. Tidal signed a note and received 70% of the amount assigned. Tidal was charged a 5% finance fee and agreed to pay interest at 12% on the unpaid balance. Some specific accounts of the assigned receivables were written off as uncollectible. The remainder of the trade accounts receivable assigned were collected by Tidal in March and April of this year. Tidal paid Herb Finance in full at the end of April of this year. Tidal also sold some special order merchandise and received a 90-day, 10%, interest-bearing note receivable on July 1 of this year. After 30 days, the note receivable was discounted with recourse at 14% at a bank.

Required
1. Explain how Tidal should account for the transactions described here for the assignment of trade accounts receivable.
2. a. Explain how Tidal should determine the amount of the discount for the note receivable.
b. Explain how the discounting transaction should be accounted for.