On January 1, 20x1, SUBDUE Co. borrowed 10%, P4,000,000 loan from CONQUER Bank. Principal is due onJanuary 1, 20x4 but interests are due annually starting January 1, 20x2. SUBDUE was charged by the bank a3% nonrefundable loan origination fee representing service fee. How much is the carrying amount of the noteon initial recognition?

Bank service fees = Loan amount x 3% = 4000000 x 3% = 120,000

Answered: On January 1, 20x1, SUBDUE Co. borrowed…

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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