ABC Bank granted a loan to a client on January 1, 20x1. The interest on the loan
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Principal amount 2,000,000
Origination fee 154,430
Direct origination cost 32,890
Indirect origination cost 5,000
After considering the origination fee received from the borrower and the direct origination cost incurred, the effective interest rate on the loan is 12%.
1. At what amount shall the loan be initially measured on January 1, 20x1?
2. How much shall be reported as interest income for 20x1?
3. What is the carrying amount of the loan on December 31, 20x1?
Related Book For
Essentials of Federal Taxation 2018
ISBN: 9781260007640
9th edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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