Question: Problem 7-10 (IAA) 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

Problem 7-10 (IAA) 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 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 For two periods For three periods 0.926 0.857 0.794 2. Complete the amortization table for the new loan agreement. Assume that any rounding off difference will be settled in the year of maturity. Collections Carrying Amount Date Interest Earned Interest Principal Acc. Int. Inc Loan Rec. Total Rec. Dec. 31, 2020 Jan. 1, 2021 Dec. 31, 2021 Jan. 1, 2022 Dec. 31, 2022 Jan. 1, 2023 3. What is the impartment loss for 2020? (1 point) 4. What s the interest income for 2021? (1 point) 5. What is the carrying amount of the loan receivable on December 31, 2021?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Please help me with the following two statistic questions 1) According to a recent survey, 30% of credit card holders pay off their balances in full each month. If a random sample of 400 credit card...

Vincent Ocon Company properly reported the following balances on December 31, 2017 Accounts receivable P1,500,000 Allowance for doubtful accounts 90,000 Accrued interest receivable loan 320,000 Loan...

Problem 1: Kalibo bank loaned P5,000,000 to Caticlan company on January 1, 2019. The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest rate at 8%. The...

Jeremiah Wedgewood, the CFO, is adamant that the company needs to move ahead with the new division. While Josey also thinks that creating a new division with a new product line is a good idea, she is...

Shown below are rental and leasing revenue figures for office machinery and equipment in the United States over a seven-year period according to the U.S. Census Bureau. Use these data to construct a...

A derangement of the numbers 1 through n is a permutation of all n those numbers such that none of them is in the right place. For example, 34251 is a derangement of 1 through 5, but 24351 is not...

Show that if {Ni(t), t 0} are independent Poisson processes with rate i , i = 1, 2, then {N(t), t 0} is a Poisson process with rate 1 + 2 where N(t) = N1(t) + N2(t).

You are chairperson of the investment fund for the Continental Soccer League. You are asked to set up a fund of semiannual payments to be compounded semiannually to accumulate a sum of $250,000 after...

EXCEL: Need help creating a formula that will return a true/false statement. I was thinking of using the IF/IFERROR(SEARCH) statement Checking row to see if any of these conditions are true or false....

3. Using only the blank forms available at: www.lRS.gov, prepare USI, Inc.'s Federal income tax return for the 2018 Tax Year including the following schedules and forms: Schedule D Form 1125-A...

Post an explanation of how identity, privilege, power, and oppression influence professional practice based on Janet Helms's explanation in the Microtraining Associates video. Then explain the...

VWX Inc., has sales of $500,000, net income of $80,000, dividend payout of 50%, total assets of $700,000 and target debt-equity ratio of 1.5. If the company grows at its sustainable growth rate in...

Because a mother does not want to "spoil" her new born baby. She feeds and takes care of her baby's physical needs when she thinks the baby needs care, not when the baby cries to indicate their...

Application of Core Conflictual Relationship Theme (CCRT) Therapy to counselling immigrants and refugees Evidence understanding of applying a contemporary psychodynamic theory which can be modified...

Which of the following features of "There Will Come Soft Rains" does not reflect postmodernism? A . Its pastiche characteristics and blending of genres: elements of satire, speculative fiction,...

Sillyday Park competes with Slide World by providing a variety of rides. Sillyday sells tickets at $60 per person as a one-day entrance fee. Variable costs are $24 per person, and fixed costs are...

Suppose that you are part of a virtual team and must persuade other team members on an important matter (such as switching suppliers or altering the project deadline). Assuming that you cannot visit...

12.13 The article Linkage Studies of the Tomato (Transactions of the Royal Canadian Institute [1931]: 119) reported the accompanying data on phenotypes resulting from crossing tall cut-leaf tomatoes...

13.27 The graphs below are based on data from an experiment to assess the effects of logging on a squirrel population in British Columbia (Effects of Logging Pattern and Intensity on Squirrel...

12.10 The report referenced in the previous exercise ( Fatality Facts 2004: Bicycles) also classified fatal bicycle accidents according to the month in which the accident occurred, resulting in the...