Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest on the loan is payable every December 31. Megabank incurred P 520,600 of direct origination cost but an origination fee of P 200,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is
Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest on the loan is payable every December 31. Megabank incurred P 520,600 of direct origination cost but an origination fee of P 200,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest on the loan is payable every December 31. Megabank incurred P 520,600 of direct origination cost but an origination fee of P 200,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 6%.
| No. | QUESTIONS | Your Answer |
| 1. | What is the carrying value of the loan receivable on January 1, 2021 in Megabank's accounting books? | |
| 2. | What is the carrying value of the loan receivable on December 31, 2023 in Megabank's accounting books? |
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