Philippine Bank granted a loan to a borrower on January 1, 2017. The interest on the loan is 8% payable anually starting December 31, 2017. The loan matures in three years on December 31, 2019. Principal amount 3,000,000 Origination fee charged against the borrower 100,000 Direct origination cost incurred 260,300 After considering the origination fee charged to the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. 3. What is the carrying amount of the loan receivable on December 31, 2017? a. 3,000,000 b. 3,160,300 c. 3,109,918 d. 3,210,682 4. What is the interest income for 2018? a. 240,000 b. 180,000 c. 248,793 d. 186,595
Philippine Bank granted a loan to a borrower on January 1, 2017. The interest on the loan is 8% payable anually starting December 31, 2017. The loan matures in three years on December 31, 2019. Principal amount 3,000,000 Origination fee charged against the borrower 100,000 Direct origination cost incurred 260,300 After considering the origination fee charged to the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. 3. What is the carrying amount of the loan receivable on December 31, 2017? a. 3,000,000 b. 3,160,300 c. 3,109,918 d. 3,210,682 4. What is the interest income for 2018? a. 240,000 b. 180,000 c. 248,793 d. 186,595
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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Question
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Philippine Bank granted a loan to a borrower on January 1, 2017. The interest on the loan is
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8% payable anually starting December 31, 2017. The loan matures in three years on December 31, 2019.
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Principal amount | 3,000,000 | |||
Origination fee charged against the borrower | 100,000 | |||
Direct origination cost incurred | 260,300 | |||
After considering the origination fee charged to the borrower and the direct
|
||||
origination cost incurred, the effective rate on the loan is 6%.
|
3. What is the carrying amount of the loan receivable on December 31, 2017?
|
|
a. 3,000,000 | |
b. 3,160,300 | |
c. 3,109,918 | |
d. 3,210,682 | |
4. What is the interest income for 2018?
|
|
a. 240,000 | |
b. 180,000 | |
c. 248,793 | |
d. 186,595 |
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