3. What is the carrying amount of the modified note payable note payable of P5,000,000 and accrued interest payable of On January 1, 2021, Kingdom Company had an c erdue 10% note payable of P5,000,000 and accrued interest payable P500,000. The entity is granted by the creditor in a debU restructuring agreement the following concessions: a. Accrued interest of P500,000 is forgiven. b. The new interest rate is 14% payable annually every December 31. c. The new maturity date of the note is December 31, 2024. d. The entity paid P290,000 to the creditor as arrangement fee or modifiïcation cost. e. Considering the effect of the modification cost or arrangement fee, the new 'effective interest rate is 12%. f. The market rate of interest for similar note is 9%. 9% 10% 12% PV of 1 for 4 periods PV of an ordinary annuity of 1 for 4 periods 0.71 0.68 0.64 3.24 3.17 3.04 1. What amount of loss on modification should be recognized for 2021? 409,000 b. 119,000 291,000 d. a. с. 2. What amount should be reported as interest expense for 2021? a. 700,000 b. 632,900 c. 561,900 d. 639,480 on December 31, 2021? a. 5,268,480 b. 5,480,900 c. 5,329,000 d. 5,000,000

3. What is the carrying amount of the modified note payable note payable of P5,000,000 and accrued interest payable of On January 1, 2021, Kingdom Company had an c erdue 10% note payable of P5,000,000 and accrued interest payable P500,000. The entity is granted by the creditor in a debU restructuring agreement the following concessions: a. Accrued interest of P500,000 is forgiven. b. The new interest rate is 14% payable annually every December 31. c. The new maturity date of the note is December 31, 2024. d. The entity paid P290,000 to the creditor as arrangement fee or modifiïcation cost. e. Considering the effect of the modification cost or arrangement fee, the new 'effective interest rate is 12%. f. The market rate of interest for similar note is 9%. 9% 10% 12% PV of 1 for 4 periods PV of an ordinary annuity of 1 for 4 periods 0.71 0.68 0.64 3.24 3.17 3.04 1. What amount of loss on modification should be recognized for 2021? 409,000 b. 119,000 291,000 d. a. с. 2. What amount should be reported as interest expense for 2021? a. 700,000 b. 632,900 c. 561,900 d. 639,480 on December 31, 2021? a. 5,268,480 b. 5,480,900 c. 5,329,000 d. 5,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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