. On Dec. 31, 20x1, Tissue Co. determines that its loan receivablefrom Breakfast Co. with a carrying amount of P5,600,000 is impaired. Tissue Co. restructures the loan reducing it to P4,200,000. The restructured loan is payable in three equal annual payments starting on Jan. 1, 20x2. All future interest are waived. The effective interest rate applied on the loan on its initial recognition is 12%. The current market rate on Dec. 31, 20x1 is 10%. How much are the impairment loss in 20x1 and the interest income in 20x2 respectively? a. 1,833,929 and 451,929 b. 2,237,436 and 403,508 c. 2,237436 and 100,492
1. On Dec. 31, 20x1, Tissue Co. determines that its loan receivablefrom Breakfast Co. with a carrying amount of P5,600,000 is impaired. Tissue Co. restructures the loan reducing it to P4,200,000. The restructured loan is payable in three equal annual payments starting on Jan. 1, 20x2. All future interest are waived. The effective interest rate applied on the loan on its initial recognition is 12%. The current market rate on Dec. 31, 20x1 is 10%. How much are the impairment loss in 20x1 and the interest income in 20x2 respectively?
a. 1,833,929 and 451,929
b. 2,237,436 and 403,508
c. 2,237436 and 100,492
d. 1,833,929 and 283,929
The topic for the above problems are RECEIVABLES - ADDITIONAL CONCEPTS
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