Loan Receivable and Receivable Financing Activity 1: Problems Problem 1: PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Origination fee charged against the borrower Direct origination costincurred 2,000,000 171,050 75,000 Indirect originationcosts 15,000 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloan is 12.5%. Q1. The carring amount ofthe loan on January 1, 2020: is Q2 Thejournal entries on January 1,2020: Problem 2 LSB granted a loan to the borrower on January 1, 2020. The interest on the loan is 8% payable annually starting December 31, 2020. Theloan matures in three years on December 31, 2022. Principal amount Origination fee charged againstthe borrower Direct origination costincurred 1,500,000 50,000 130,150 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloanis 6%. Q1: the carrying amount ofloan on January 1,2020 is: Q2 the journal entry on January 1, 2020 would be:
Loan Receivable and Receivable Financing Activity 1: Problems Problem 1: PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Origination fee charged against the borrower Direct origination costincurred 2,000,000 171,050 75,000 Indirect originationcosts 15,000 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloan is 12.5%. Q1. The carring amount ofthe loan on January 1, 2020: is Q2 Thejournal entries on January 1,2020: Problem 2 LSB granted a loan to the borrower on January 1, 2020. The interest on the loan is 8% payable annually starting December 31, 2020. Theloan matures in three years on December 31, 2022. Principal amount Origination fee charged againstthe borrower Direct origination costincurred 1,500,000 50,000 130,150 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloanis 6%. Q1: the carrying amount ofloan on January 1,2020 is: Q2 the journal entry on January 1, 2020 would be:
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
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Transcribed Image Text:Loan Receivable and Receivable Financing
Activity 1: Problems
Problem 1:
PDR Bank granted a loan to a borrower on January1, 2020. The interest on the loan is 10% payable annually
starting December 31, 2020. The loan matures in three years on December 31, 2022.
Principal amount
Origination fee charged againstthe borrower
Direct origination cost incurred
Indirect origination costs
2,000,000
171,050
75,000
15,000
After considering the origination fee charged againstthe borrower and the direct origination costincurred, the
effective rate on theloan is 12.5%.
Q1. The carrying amount oftheloan on January 1, 2020: is
Q2: The journal entries on January 1,2020:
Problem 2:
LSB granted a loan to the borrower on January1, 2020. The interest on the loan is 8% payable annually
starting December 31, 2020. Theloan matures in three years on December 31, 2022.
Principal amount
Origination fee charged against the borrower
Direct origination cost incurred
1,500,000
50,000
130,150
After considering the origination fee charged againstthe borrower and the direct origination costincurred, the
effective rate on theloan is 6%.
Q1: the carrying amount ofloan on January 1,2020 is:
Q2: the journal entry on January 1, 2020 would be:
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