1. What amount should be reported as loan impairment loss for 2023? 410,000 b. 210,000 220,000 a. c. d. 2. What amount should be reported as interest income for 2024?
Kalibo Bank loaned P5,000,000 to Caticlan Company on January 1, 2021. 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, 2021. Caticlan Company made the required payments during 2022 and 2023.
However, during 2023 Caticlan Company began to experience financial difficulties, requiring the Kalibo bank to reassess the collectibility of the loan.
On December 31, 2020, the Kalibo bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. Kalibo Bank did not accrue the interest on Dec. 21, 2023.
Present value of 1 at 8%:
For one period 0.93
For two periods 0.86
For three periods 0.79
1. What is the impairment loss for 2023?
2. What is the interest income for 2024?
3. What is the carrying amount of the loan receivable on December 31, 2024?
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