nt value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the impairment lo
Q: On December 31, 2020, Rose National Bank enters into a debt restructuring agreement with Emerald…
A: Debt restructuring is a process where a company experiencing financial liquidity problems…
Q: Required: Round interim calculations to four decimals and final answers to the nearest dollar.…
A: Present Value-Present value is the concept that states that an amount of money today is worth more…
Q: On January 1, 2016, Harrieth Bank, Inc. approved the loan to Marideth Company for P 5,000,000. The…
A: Present value of a loan can be referred as the existing value of future outflows of a loan. In order…
Q: On December 31, 2016, London Bank granted a P5,000,000 loan to borrower with 10% stated rate payable…
A: Debt restructuring is the process in which the lender of the money negotiates with the borrower…
Q: What is the present value of the new liability? What is the gain on modification of debt for 2021?…
A:
Q: J-Hope Company experiences financial difficulties and began defaulting on the loan to International…
A: J-Hope Company's Loan receivable = P3300000 Including accrued interest = P300000 Carrying amount of…
Q: VKS Bank loaned P5,000,000 to IntAcc1 Company on January 1, 2018. The terms of the loan require…
A: In order to determine the impairment loss, the present value of the loan is required to be…
Q: A bank is considering using a “three against six” $2,000,000 FRA to cover its potential loss. The…
A: Bank is considering using a “three against six” = $2,000,000 FRAthe maturity mismatch from having…
Q: On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a…
A: Notes are the financial instruments which are quite similar to bond as they have maturity period and…
Q: On December 31, 2023, Green Bank enters into a debt restructuring agreement with Windsor Inc., which…
A: Financial statement:The financial statement is a record or statement that the business prepares…
Q: On December 31, 2019, Panda Bank recorded an investment of P5,000,000 in a loan granted to a client.…
A: Impairment losses arise when the present value is less than the carrying value. For example:…
Q: Dayannara Bank loaned P5,000,000 to Dama Company on January 1, 2007. The terms of the loan require…
A: In order to determine the impairment loss, the present value of the loan is required to be…
Q: On December 31, 2020, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000…
A: Borrowed amount = $ 62092 Interest to yield = 10% Market rate of interest is 11% On December 31 ,…
Q: On December 31, 2023, Green Bank enters into a debt restructuring agreement with Windsor Inc., which…
A: A debt restructuring is the method through which companies or banks alter the conditions and terms…
Q: On May 3, 2020, Leven Corporation negotiated a short-term loan of $685,000. The loan is due October…
A: Loan - $ 685,000 Interest – 6.86% Date borrowed= May 3 Date repaid = October 1
Q: ABC Company is in financial difficulties and was not able to pay the 10% interest of P100,000 due on…
A: One of the source used by the business entities so as to raise the funds and meet the financial…
Q: Milo Corporation has a line of credit with BDO for Ҏ5,000,000 in June 30, 2018 payable on December…
A: Here, Compensating Balance is 5% Charges are 15% Line of Credit issued on June 30,2018 Payable Date…
Q: (Expected Cash Flows) On January 1, 2017, Botosan Company issued a $1,200,000, 5-year,…
A: Journal entry is a record of financial transaction in the books of accounts maintained by an…
Q: Magic Finance Company reports a loan receivable from Blue Company in the amount of P5,000,000. The…
A: When an asset's value considerably declines and its carrying amount on the balance sheet exceeds its…
Q: On January 1, 2016, Harrieth Bank, Inc. approved the loan to Marideth Company for P 5,000,000. The…
A:
Q: The owner of Jewel Company had a loan from Metrobank amounting to ₱500,000. The bank requires the…
A: Accrued interest on loan ( from November 1, 2020 to December 31, 2020 ) = ₱500,000 x 12% x 212 =…
Q: What is the forecasted interest expense on Comfy Homes 2018 pro forma financial statements? When the…
A: Here's a detailed calculation for better understanding. To forecast the interest expense for Comfy…
Q: Due to extreme financial difficulties, Armada Company has negotiated a restructuring of its 10%…
A: Calculation of total present value of new debt: = (Debt amount ×PVF @10%, 3 years) +(Debt…
Q: On January 1, 2021, Saltimbocca Corporation borrowed $192,772 from Morgan Stanley. Under the terms…
A: The question demands the interest expense for the third year of the loan. In order to determine…
Q: Metrobank made a $2,000,000, 8% loan on January 1, 2018. The $160,000 interest is receivable at the…
A: Loan impairment loss is the amount of difference between the fair value and carrying value of the…
Q: On December 31, 2020, Iva Majoli Company borrowed $62,092 from Paris Bank, signing a 5-year,…
A:
Q: On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a…
A: In finance, the term promissory note represents a written document in which one person promises to…
Q: Due to extreme financial difficulties, Armada Company has negotiated a restructuring of its 10%…
A:
Q: On December 31, 2025, Nash Company signed a $1,035,300 note to Crane Bank. The market interest rate…
A: The notes payable are a current liability for an entity that issues the same. It may be a long-term…
Q: ST Bank granted a $1 million loan to Company A on 1 January 2015 at par. The loan is repayable in 2…
A: For recording of journal entries, the loss on issuing the loan at 7% instead of 9% has to be taken…
Q: Uno Bank reports a loan receivable from Davao Air in the amount of P50 million on January 1, 2016.…
A:
Q: 12. Using the information in MC 11, what amount will Camry report as fair value of the interest rate…
A: Interest rate swap is an agreement between two parties in order to exchange one type of interest…
Q: On December 31, 2017, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000…
A: (a) Prepare the entry (if any) to record the impairment of the loan on December 31, 2019, by Paris…
Q: On December 31, 2020, Oriole Company has $6,941,000 of short-term debt in the form of notes payable…
A: Notes payable that expected to be refinanced Minimum= 5949000×52% =$3093480 Maximum=7947000× 52%…
Q: On December 31, 2019, GMC had a document payable with a value in the $ 100,000 books. GMC has faced…
A: The given debt restructuring involves both reduction of amount due and reduction of interest rates.…
Q: On May 3, 2020, Leven Corporation negotiated a short-term loan of $885,000. The loan is due October…
A: Interest = Principal x Rate of Interest x Time(Yrs) I = P×R×T
Q: 00 loan to a borrower ce payable SEMI-ANN in 4 years. The loan L
A:
Q: During 2021, PUMPKIN Company experienced financial difficulties and is likely to default on a…
A: Here in this question, we are required to calculate how much gain or loss should recorded on…
Q: On January 1, 2019, Wolverine Corporation borrowed $1,450,000 by signing a note from Spartan City…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: On January 1, 2020, ABC Co. borrowed P5,000,000 from a bank at a variable rate of interest for 4…
A: Investors should be aware of and employ the benefits of hedging as a financial strategy because of…
Q: CPA Bank Co. loaned P6,750,000 to a borrower on January 1, 2018. The terms of the loan were payment…
A: When Estimated Fair value of an asset is less than from its carrying value then such difference…
Q: On December 31, 2019, Guimary Corporation is experiencing extreme financial pressure and is in…
A: In the given question, Guimary corporation is in default in meeting interest payment on its long…
Q: BDO loaned P5,000,000 to NOBLE Company on January 1, 2016. The terms of the loan require the…
A: Impairment loss refers to the loss incurred to the company due to a significant decline in the value…
On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31 ,2022, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is 0.57 for five periods and 0.71 for three periods. In addition, the present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the impairment loss on loan receivable to be recognized in 2022?
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Lowlife Company defaulted on a $200,000 loan that was due on December 31, 2024. The bank has agreed to allow Lowlife to repay the $200,000 by making a series of equal annual payments beginning on December 31, 2025. Required: 1. Calculate the required annual payment of the bank's Interest rate is 10% and four payments are to be made. 2. Calculate the required annual payment of the bank's Interest rate is 8% and five payments are to be made. 3. If the bank's Interest rate is 10%, how many annual payments of $28,156 would be required to repay the debt? 4. If three payments of $72,070 are to be made, what interest rate is the bank charging Lowlife? Note: For all requirements, Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the required annual payment if the bank's interest rate is 10% and four payments…On December 31, 2023, Green Bank enters into a debt restructuring agreement with Teal Mountain Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.1-million, 10% note receivable issued at par by the following modifications: 1. Reducing the principal obligation from $2.1 million to $2.00 million Extending the maturity date from December 31, 2023, to December 31, 2026 3. Reducing the interest rate from 10% to 8% 2. Teal Mountain pays interest at the end of each year. On January 1, 2027, Teal Mountain pays $2.00 million in cash to Green Bank. Teal Mountain prepares financial statements in accordance with IFRS 9. (b) Prepare an entry at December 31, 2023, based on the results of your calculation. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry…On May 3, 2020, Leven Corporation negotiated a short-term loan of $645,000. The loan is due October 1, 2020, and carries a 5.30% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Maturity value
- On December 31, 2020, Sarasota Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Sarasota Co. agreed to accept a $337,600 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 11%. Sarasota is much more creditworthy and has various lines of credit at 5%. Click here to view factor table. (a) Your answer is partially correct. Prepare the journal entry to record the transaction of December 31, 2020, for the Sarasota Co. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Dec. 31, 2020 Account Titles and Explanation Notes Receivable Service Revenue Discount on Notes Receivable Debit…During 2021, PUMPKIN Company experienced financial difficulties and is likely to default on a ₱5,000,000, 15% three-year note dated January 1, 2019, payable to Summit Bank. On December 31, 2021, the bank agreed to settle the note and unpaid interest of ₱750,000 for 2021 for ₱4,100,000 cash payable on January 31, 2022. What amount should PUMPKIN report as gain or loss from extinguishment of debt in its 2021 income statement? (If gain, maintain as is; if loss, put a negative (-) sign before the numerical figure)On May 3, 2020, Leven Corporation negotiated a short-term loan of $870,000. The loan is due October 1, 2020, and carries a 6.80% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Maturity value:
- On January 1, 2019, an entity was indebted to a bank under a P4,800,000, 10% loan. The loan was dated January 1, 2017 and was due on December 31, 2020. The annual interest was last paid on December 31, 2017. The entity was experiencing financial troubles and therefore the bank considered the loan impaired. The bank agreed to reduce last year's interest and the remaining two years interest payments to P200,000 each and delay all such payments on December 31, 2020. The present value of 1 at 10% for 2 periods is 0.83. The entity also reported the net realizable value of accounts receivable in the amounts of P1,000,000 and P1,200,000 on December 21, 2019 and 2018, respectively. It was also disclosed that the allowance for doubtful accounts on December 31, 2019 and 2018 were P100, 000 and P130,000 respectively. Credit sales amounted to P4,770,000 & collections from customers totaled P4,800,000. Certain accounts were written off during the year.What is the impairment on the loan for…The Electric Car Corporation borrowed $3,000,000 from the Bank of Walnut Creek on October 1, 2021. The loan was from an SBA (Small Business Administration) program that required interest only payments annually at the low rate of 1.75%. At the end of 5 years, on October 1, 2026 the entire loan of $3,000,000 must be repaid. In the event it is not repaid, the interest rate of 1.75% will be increased retroactively at a rate of 7.5%. In order to assure that the loan can be repaid on October 1, 2026, the Chief Financial Officer wants to set up a special fund to contribute to each and every year in order to have sufficient funds to repay the loan in full on October 1, 2026. The Investment firm of J. Edward and Associates of Emeryville, California has an investment fund available that has an annual fixed return of 5%. The Electric Car Corporation wants to start making an annual deposit to the fund beginning in one year starting on October 1, 2022, and for each of the next three years of…What is the forecasted current portion of bank loan on comfy homes 2018 pro forma financial statements. The $45000 current portion of the bank loan will be paid in December 31, 2018. Of the $255000 in long term debt, another $45000 comes due on December 31, 2019. Comfy home does not plan to obtain any additional loans in 2018. The interest rate for comfy homes borrowing has declined to 6%. It is expected to be the average rate of interest for comfy home short and long term borrowings in 2018. Revenues believe to increase 30% in 2018.
- On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October 1, 2020, and carries a 5.40% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent.An entity had an outstanding loan of P3,000,000. The loan has an effective interest rate of 12%. On December 31, 2019, the entity was experiencing financial difficulty and entered into a restructuring agreement with a bank under the following modifications: reduce the principal balance by 20%, extend the maturity date from December 31, 2019 to January 1, 2023 and reduce the interest rate to 10%. Interest is payable annually every December 31. There was no accrued interest as December 31, 2019. The present value factors of 1 for three periods at 10% and 12% are 0.751 and 0.712, respectively. The present value factors of an ordinary annuity for three periods at 10% and 12% are 2.487 and 2.402, respectively. 35. What amount of gain should be reported as a result of the modification of terms under IFRS? a. P720,000 b. P600,720 C. P714,720 d. PO 36. What amount of interest expense should be reported for the year ended December 31, 2020? a. P274,234 b. P240,000 c. P239,928 d. P288,000Details for one of the loan of BB Company that is probably impaired during the period is as follows: The company made a loan of P40,000,000 to a customer with similar credit risk to BB Company on January 1, 2021. Interest is receivable on this loan at the end of each year at 2% per annum for the next five years. The loan was properly recorded and classified as amortized cost. The company made and initial assessment of the loan and the total expected credit losses over the life of the loan was P1,000,000. The discount rate applicable was at 2%. On January 1, 2021, the probability of default over the next 12 months was 5%. At December 31, 2021, there was a significant increase in the credit risk on the loan made by BB Company, the expert assessed that the total expected credit losses over the life of the loan was increase to P2,200,000. The discount rate applicable was at 2%. How much is the balance of the allowance for credit losses as of December 31, 2021?
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)