Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021. The terms of the loan were payment in full on December 31, 2026 plus annual interest payment at 8% every December 31. The first interest payment was made on December 31, 2021. However, on December 31, 2021, due to financial difficulties, the borrower informed Freetown Bank that it would probably miss the interest payments for the next two years. After that, the borrower expects to resume the annual interest payment but the principal would be paid on December 31, 2027 or ane year late with interest paid for that additional year. Accordingly, the payments from the borrower are scheduled as follows: Amount 12/31/2022 No interest payment Nil 12/31/2023 No interest payment Nil P 240,000 240,000 240,000 240,000 3,000,000 Date of Flow Cash Flow 12/31/2024 Interest payment 12/31/2025 Interest payment 12/31/2026 Interest payment 12/31/2027 Interest payment Principal payment
Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021. The terms of the loan were payment in full on December 31, 2026 plus annual interest payment at 8% every December 31. The first interest payment was made on December 31, 2021. However, on December 31, 2021, due to financial difficulties, the borrower informed Freetown Bank that it would probably miss the interest payments for the next two years. After that, the borrower expects to resume the annual interest payment but the principal would be paid on December 31, 2027 or ane year late with interest paid for that additional year. Accordingly, the payments from the borrower are scheduled as follows: Amount 12/31/2022 No interest payment Nil 12/31/2023 No interest payment Nil P 240,000 240,000 240,000 240,000 3,000,000 Date of Flow Cash Flow 12/31/2024 Interest payment 12/31/2025 Interest payment 12/31/2026 Interest payment 12/31/2027 Interest payment Principal payment
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
![Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021.
The terms of the loan were payment in full on December 31, 2026 plus annual interest payment
at 8% every December 31. The first interest payment was made on December 31, 2021.
However, on December 31, 2021, due to financial difficulties, the borrower informed Freetown
Bank that it would probably miss the interest payments for the next two years. After that, the
borrower expects to resume the annual interest payment but the principal would be paid on
December 31, 2027 or one year late with interest paid for that additional year. Accordingly, the
payments from the borrower are scheduled as follows:
Date of Flow Cash Flow
Amount
12/31/2022 No interest payment Nil
12/31/2023 No interest payment Nil
12/31/2024 Interest payment
12/31/2025 Interest payment
12/31/2026 Interest payment
12/31/2027 Interest payment
P 240,000
240,000
240,000
240,000
3,000,000
Principal payment
34. The carrying amount of the loan receivable at December 31, 2022 is:
35. The interest income to be recognized in 2024 is:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93b33c94-ad2e-4f23-8953-faaa015a4ae2%2Fe39306d2-98e8-4251-be6f-dcb6318380b5%2F6g4dy5_processed.png&w=3840&q=75)
Transcribed Image Text:Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021.
The terms of the loan were payment in full on December 31, 2026 plus annual interest payment
at 8% every December 31. The first interest payment was made on December 31, 2021.
However, on December 31, 2021, due to financial difficulties, the borrower informed Freetown
Bank that it would probably miss the interest payments for the next two years. After that, the
borrower expects to resume the annual interest payment but the principal would be paid on
December 31, 2027 or one year late with interest paid for that additional year. Accordingly, the
payments from the borrower are scheduled as follows:
Date of Flow Cash Flow
Amount
12/31/2022 No interest payment Nil
12/31/2023 No interest payment Nil
12/31/2024 Interest payment
12/31/2025 Interest payment
12/31/2026 Interest payment
12/31/2027 Interest payment
P 240,000
240,000
240,000
240,000
3,000,000
Principal payment
34. The carrying amount of the loan receivable at December 31, 2022 is:
35. The interest income to be recognized in 2024 is:
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education