Magic Finance Company reports a loan receivable from Blue Company in the amount of P5,000,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,000,000 on January 1 of each year. The loan was made on January 1, 2022. Blue made the P500,000 interest payments for 2022 but did not make the P1,000,000 principal payment nor the P500,000 interest payment in 2023. Blue is having financial difficulty and Magic has concluded that the loan is impaired. Analysis of Blue's financial condition on - December 31, 2023 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing of collection are determined as follows: December 31, 2024 - P1,750,000 December 31, 2025 - 2,000,000 December 31, 2026 - 1,750,000 Total P5,500,000 The preset value factors at 10% are as follows: 1 period - 0.09; 2 periods - 0.826; 3 periods - 0.751 Question: 47. How much is the interest revenue reported for the year ended December 31, 2024? A. P550,000 B. P455,700 C. P375,000 D. P0
Magic Finance Company reports a loan receivable from Blue Company in the amount of P5,000,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,000,000 on January 1 of each year. The loan was made on January 1, 2022. Blue made the P500,000 interest payments for 2022 but did not make the P1,000,000 principal payment nor the P500,000 interest payment in 2023. Blue is having financial difficulty and Magic has concluded that the loan is impaired. Analysis of Blue's financial condition on - December 31, 2023 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing of collection are determined as follows:
December 31, 2024 - P1,750,000
December 31, 2025 - 2,000,000
December 31, 2026 - 1,750,000
Total P5,500,000
The preset value factors at 10% are as follows:
1 period - 0.09; 2 periods - 0.826; 3 periods - 0.751
Question:
47. How much is the interest revenue reported for the year ended December 31, 2024?
A. P550,000
B. P455,700
C. P375,000
D. P0
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