3. On December 1, 2017, Kreme Company assigned on a nonnotification basis accounts receivable of P5,000,000 to a bank in consideration for a loan of 80% of the receivables less a 5% service fee on the...

Extracted text: 3. On December 1, 2017, Kreme Company assigned on a nonnotification basis accounts receivable of P5,000,000 to a bank in consideration for a loan of 80% of the receivables less a 5% service fee on the accounts assigned. Kreme collected assigned accounts of P2,000,000, allowing sales discounts of P200,000 and remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. In its December 31, 2017 financial statements, What should Kreme disclose as its equity in the assigned accounts? а. 760,000 b. 2,240,000 c. 800,000 d. 3,000,000 С.