what's the best answe for problem 7-5 and 7-7 On December 31, 2021, Durable Bank has a loan receivableof P4,000,000 from a borrower that it is' carrying at faceProblem 7-7 (IAA)amount and is due on December 31, 2026.Interest on the loan is payable at 9% each December 31.The borrower paid the interest due on December 31, 202but informed the bank that it would probably miss the nexttwo years' interest payments because of financial difficulty.After that, the borrower is expected to resume the annualinterest payment but it would make the principal paymentone year late, with interest paid for that additional year atthe time of principal payment.Present value of 1 at 9%.917.842One periodTwo periodsThree periodsFour periodsFive periodsSix periods.772.708.650.596Required:1. Compute the present value of the loan receivable onDecember 31, 2021.2. Compute the impairment loss to be recognized onDecember 31, 20121.3. Prepare journal entries from 2021 to 2027. Problem 7-5 (IAA)Solvent Bank loaned P10,000,000 to a borrower on January1. 2019. The terms of the loan require principal payments ofP2,000,000 each year for 5 years plus interest at 8%.rtingCS onThe first principal and interest payment is due on December31, 2019. The borrower made the required payments onDecember 31, 2019 and December 31, 2020.000300000However, during 2021 the borrower began to experiencefinancial difficulties, requiring the bank to reassess thecollectibility of the loan.werrateOn December 31, 2021, the bank has determined that theremaining principal payments will be collected but thecollection of the interest is unlikely. The bank has accruedthe interest for 2021.Expected principal payments1,000,0002,000,0003,000,000December 31, 2022December 31, 2023December 31, 2024ononPresent value of 1 at 8%.93.86For one periodFor two periodsFor three periods.79neveRequired:1. Compute the impairment loss on the loan receivable.2. Prepare journal entries for 2021, 2022 and 2023.

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of P4,000,000 from a borrower that it is carrying at face of P4,000,000 from a borrower that it is carrying at 1ace amount and is due on December 31, 2026. The borrower paid the interest due on December 31, 2021 On December 31, 2021, Durable Bank has a loan receivable nterest on the loan is pavable at 9% each December 31. the next

of P4,000,000 from a borrower that it is carrying at face of P4,000,000 from a borrower that it is carrying at 1ace amount and is due on December 31, 2026. The borrower paid the interest due on December 31, 2021 On December 31, 2021, Durable Bank has a loan receivable nterest on the loan is pavable at 9% each December 31. the next

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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