1. Prepare the amortization table.
2. What is the correct carrying value of the loans receivables as of December 31, 2010?
3. What is the impairment loss to be recognized in the 2010 statement of comprehensive income?
4. What is the correct carrying value of the loan receivable as of December 31, 2012?
5. Prepare the journal entry to record the impairment loss for 2010.
6. Prepare all journal entries for 2011 in Fernando’s books

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On December 31, 2008, FERNANDO Company, a financing institution lent P3,000,000 to TEODORO Corp. due 2 years after. The loan is supported by an 8% note receivable. Interests on the loan are collectible at the end of each year. Fernando was able to collect interest as it became due at the end of 2009 but didn't accrue the interest at the end of 2010. During 2010, however, due to Teodoro Corporation's business deterioration and due to political instability and faltering global economy, the company was not able to collect amounts due at the end of 2010. After reviewing all available evidence at December 31, 2010, Fernando Company determined that it was probable that Teodoro would pay back only P2,400,000 collectible as follows: December 31, 2011 December 31, 2012 P1,000,000 700,000 December 31, 2013 500,000 December 31, 2014 200,000 As of December 31, 2010, the prevailing rate of interest for all debt instruments is 14%. The present value factor of 1 at 14% for: 0.8772 1 period 2 periods 3 period 4 periods 5 periods Based on the above information and on your audit, answer the following requirements: Prepare the amortization table. 1. 2. What is the correct carrying value of the loans receivables as of December 31, 2010? 3456N 0.7695 0.6750 0.5921 0.5194 3. What is the impairment loss to be recognized in the 2010 statement of comprehensive income? What is the correct carrying value of the loan receivable as of December 31, 2012? Prepare the journal entry to record the impairment loss for 2010. 5. 6. Prepare all journal entries for 2011 in Fernando's books. 4. On December 31, 2008, FERNANDO Company, a financing institution lent P3,000,000 to TEODORO Corp. due 2 years after. The loan is supported by an 8% note receivable. Interests on the loan are collectible at the end of each year. Fernando was able to collect interest as it became due at the end of 2009 but didn't accrue the interest at the end of 2010. During 2010, however, due to Teodoro Corporation's business deterioration and due to political instability and faltering global economy, the company was not able to collect amounts due at the end of 2010. After reviewing all available evidence at December 31, 2010, Fernando Company determined that it was probable that Teodoro would pay back only P2,400,000 collectible as follows: December 31, 2011 December 31, 2012 P1,000,000 700,000 December 31, 2013 500,000 December 31, 2014 200,000 As of December 31, 2010, the prevailing rate of interest for all debt instruments is 14%. The present value factor of 1 at 14% for: 0.8772 1 period 2 periods 3 period 4 periods 5 periods Based on the above information and on your audit, answer the following requirements: Prepare the amortization table. 1. 2. What is the correct carrying value of the loans receivables as of December 31, 2010? 3456N 0.7695 0.6750 0.5921 0.5194 3. What is the impairment loss to be recognized in the 2010 statement of comprehensive income? What is the correct carrying value of the loan receivable as of December 31, 2012? Prepare the journal entry to record the impairment loss for 2010. 5. 6. Prepare all journal entries for 2011 in Fernando's books. 4.

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1 The amortization table is as follows Year Principal Interest Payment Carryi... View the full answer