PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount 2,000,000 Origination fee charged against the borrower 171,050 Direct origination cost incurred 75,000 Indirect origination costs 15,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12.5%. Q1. The carrying amount of the loan on January 1, 2020: is ______________________ Q2: The journal entries on January 1, 2020:
PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount 2,000,000 Origination fee charged against the borrower 171,050 Direct origination cost incurred 75,000 Indirect origination costs 15,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12.5%. Q1. The carrying amount of the loan on January 1, 2020: is ______________________ Q2: The journal entries on January 1, 2020:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually
starting December 31, 2020. The loan matures in three years on December 31, 2022.
Principal amount 2,000,000
Origination fee charged against the borrower 171,050
Direct origination cost incurred 75,000
Indirect origination costs 15,000
After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12.5%.
Q1. The carrying amount of the loan on January 1, 2020: is ______________________
Q2: The
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