On January 1, 20X9, Fast Bank made a P2,000,000, 8% loan. The P160,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 20X9, the first year's interest of P160,000 has not yet been received because the borrower is experiencing financial difficulties. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5 year loan term. In addition, the amount of principal repayment will be dropped from P2,000,000 to P1,200,000. The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 20X9 in connection with the loan. What is the loan impairment loss for 20X9?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
On January 1, 20X9, Fast Bank made a P2,000,000, 8% loan. The P160,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 20X9, the first year's interest of P160,000 has not yet been received because the borrower is experiencing financial difficulties. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5 year loan term. In addition, the amount of principal repayment will be dropped from P2,000,000 to P1,200,000. The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 20X9 in connection with the loan. What is the loan impairment loss for 20X9?
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