Global bank loaned P9,000,000 to a borrower on January 1, 2018. The terms of the loan were payment in full on January 1,2023, plus annual interest payment at 12%. The interest payment was made a scheduled on January 1, 2019. However, due to financial setbacks, the borrower was unable to make the 2020 interest payment. The bank considered the loan impaired and projected the cash flows from the loan on December 31, 2020. The bank has accrued the interest on December 31, 2019, but did not continue to accrue interest for 2020 due tot he impairment of the loan. The projected cash flows are: Amount projected on December 31, 2020 1,500,000 2,000,000 2,500,000 Date of cash flow December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 3,000,000 The present value of 1 at 12% is .89 for one period, .80 for two periods, .71 for three periods, and .64 for four periods. What is the interest income for 2021? A.795,600 B.900,000 C.180,000 O D.0

Global bank loaned P9,000,000 to a borrower on January 1, 2018. The terms of the loan were payment in full on January 1,2023, plus annual interest payment at 12%. The interest payment was made a scheduled on January 1, 2019. However, due to financial setbacks, the borrower was unable to make the 2020 interest payment. The bank considered the loan impaired and projected the cash flows from the loan on December 31, 2020. The bank has accrued the interest on December 31, 2019, but did not continue to accrue interest for 2020 due tot he impairment of the loan. The projected cash flows are: Amount projected on December 31, 2020 1,500,000 2,000,000 2,500,000 Date of cash flow December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 3,000,000 The present value of 1 at 12% is .89 for one period, .80 for two periods, .71 for three periods, and .64 for four periods. What is the interest income for 2021? A.795,600 B.900,000 C.180,000 O D.0

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 30E

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On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
CPA Bank Co. loaned P6,750,000 to a borrower on January 1, 2018. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 12%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, the borrower was unable to make the 2020 interest payment. The bank considered the loan impaired and projected the cash flows from the loan on December 31, 2020. The bank has accrued the interest on December 31, 2019, but did not continue to accrue interest for 2020 due to the impairment of the loan. The projected cash flows are: December 31, 2021, P1,125,000; December 31, 2022, P1,500,000; December 31, 2023, P1,875,000 and December 31, 2024, P2,250,000. The present value of 1 at 12% is 0.89 for one period, 0.80 for two periods, 0.71 for three periods and 0.64 for four periods. What is the carrying amount loan receivable as of December 31, 2021?
RM Beach Bank loaned Dynamite Company P7,500,000 on January 1, 2018. The terms of the loan were payment in full on January 1, 2023 plus interest payment at 11%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, Dynamite was unable to make its 2020 interest payment. RM Beach considers the loan impaired and projects the cash flows from the loan as of December 31, 2020. Assume that the bank accrued the interest at December 31, 2019, but did not continue to accrue interest due to the impairment of the loan. The projected cash flows are: December 31, 2021- P500,000; December 31, 2022- P1,000,000; December 31, 2023- P2,000,000; December 31, 2024- P4,000,000. Using two decimal places for the present value factor, how much is the loan impairment loss on December 31, 2020? A. P5,360,000 B. P2,965,000 C. P2,140,000 D. P2,240,000
What is the interest income for 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projected the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projected cash flows are: Date of cash flow Amount projected on December 31, 2021 December 31, 2022 December 31, 2023 500,000 1,000,000 December 31, 2024 2,000,000 December 31, 2025 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 589,600 b. 534,600 O c. 825,000 O d. 599,456
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Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P 1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectibility of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. Present value of 1 at 8%For one period 0.926For two periods 0.857 For three periods 0.794 1. What is the interest income for 2021?2. What is the carrying amount of the loan receivable on December 31, 2021?
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P 1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectibility of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. Present value of 1 at 8%For one period 0.926For two periods 0.857 For three periods 0.794 1. What is the impairment loss for 2020?2. What is the interest income for 2021?3. What is the carrying amount of the loan receivable on December 31, 2021?
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment are due on January 1, 2019. The borrower made the required payments during 2019 and to 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. vnGomo) au9 Vd bonsbneu 6w lodio 69y tne ert On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020.o 82 o1 1supe b6dblori e beniste16 bns PE to est s bs261obstert Present value of 1 at 8%vs beidpiew s no belugmo j2oi bap ab obsi snl.noitibe nl For one period For two periods For three periods 0.926 avsb D21o glnevis91 2nu6 Sonitotisteri mort bovia 0.857 ini rdabo to inuoms ei…
What is the carrying amount of the loan receivable on December 31, 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projected the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projected cash flows are: Date of cash flow Amount projected on December 31, 2021 December 31, 2022 500,000 1,000,000 December 31, 2023 December 31, 2024 December 31, 2025 2,000,000 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 7,000,000 b. 5,449,600 c. 4,860,000 d.…
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