On January 1, 2016, Harrieth Bank, Inc. approved the loan to Marideth Company for P 5,000,000. The terms of the loan were payment in full on December 31, 2020 plus annual interest payments at 10% every end of the calendar period starting year 2016 until December31, 2020. Due to COVID-19 pandemic, Marideth Company is experiencing decline in revenues and is likely to default on its loan payment with Harrieth Bank, Inc. This made Marideth Company to request for a loan restructuring on December 31, 2020. On this date, Harrieth Bank, Inc. accrued the interest for the year 2020. Both parties agreed to condone half of the interest receivable while the other half will be paid on restructuring date. In addition, the maturity date is extended to December 31, 2022 with no interest during the extended term. Round off all present value factors to four decimal places. No. QUESTIONS Your Answer 1. What is the present value of the future cash flows as of restructuring date?
On January 1, 2016, Harrieth Bank, Inc. approved the loan to Marideth Company for P 5,000,000. The terms of the loan were payment in full on December 31, 2020 plus annual interest payments at 10% every end of the calendar period starting year 2016 until December31, 2020.
Due to COVID-19 pandemic, Marideth Company is experiencing decline in revenues and is likely to default on its loan payment with Harrieth Bank, Inc. This made Marideth Company to request for a loan restructuring on December 31, 2020. On this date, Harrieth Bank, Inc. accrued the interest for the year 2020. Both parties agreed to condone half of the interest receivable while the other half will be paid on restructuring date. In addition, the maturity date is extended to December 31, 2022 with no interest during the extended term.
Round off all
| No. | QUESTIONS | Your Answer |
| 1. | What is the present value of the future cash flows as of restructuring date? |
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