poor a restructuring of a 9% P6,000,000 note payable to Second Due 'to adverse economic circumstances and negotiated management, Tagaytay Highlands Company had Bank due on January 1, 2020. There was no accrued on the note on January 1, 2020. interest The bank reduced the principal obligation from P6,000.00m to P5,000,000 and extended the maturity to three years December 31, 2022. However, the new interest rate is 13% payable annuall, every December 31. The present value of 1 at 9% for three periods is .77 and the present value of an ordinary annuity of 1 at 9% for three periods is 2.53. 1. What is the present value of the new note payable on January 1, 2020? a. 6,000,000 b. 5,000,000 c. 5,494,500 d. 3,850,000 2. What is the gain on modification of debt to be recognized for 2020? 500,000 b. a. 350,000 505,500 d. с. 3. What is the interest expense for 2020 as a result of the modification? a. 650,000 b. 450,000 c. 494,505 d. 540,000
poor a restructuring of a 9% P6,000,000 note payable to Second Due 'to adverse economic circumstances and negotiated management, Tagaytay Highlands Company had Bank due on January 1, 2020. There was no accrued on the note on January 1, 2020. interest The bank reduced the principal obligation from P6,000.00m to P5,000,000 and extended the maturity to three years December 31, 2022. However, the new interest rate is 13% payable annuall, every December 31. The present value of 1 at 9% for three periods is .77 and the present value of an ordinary annuity of 1 at 9% for three periods is 2.53. 1. What is the present value of the new note payable on January 1, 2020? a. 6,000,000 b. 5,000,000 c. 5,494,500 d. 3,850,000 2. What is the gain on modification of debt to be recognized for 2020? 500,000 b. a. 350,000 505,500 d. с. 3. What is the interest expense for 2020 as a result of the modification? a. 650,000 b. 450,000 c. 494,505 d. 540,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![management, Tagaytay Highlands Company had negotiated
a restructuring of a 9% P6,000,000 note payable to Second
Bank due on January 1, 2020. There was no accrued interest
Problem 9-17 (IAA)
Due 'to adverse economic circumstances and
poor
on the note on January 1, 2020.
As a resul
First Ban
of P800,00
The bank reduced the principal obligation from P6,000,000
to P5,000,000 and extended the maturity to three years
December 31, 2022.
However, the new interest rate is 13% payable annuall.
every December 31.
The p
The a
The d
Annu
The present value of 1 at 9% for three periods is .77 and the
present value of an ordinary annuity of 1 at 9% for three
periods is 2.53.
Decen
The pres
present
is 3.17.
1. What is the present value of the new note payable on
January 1, 2020?
1. Wha
Janu
a. 6,000,000
b. 5,000,000
c. 5,494,500
d. 3,850,000
b.
2. What is the gain on modification of debt to be recognized
C.
for 2020?
d.
500,000
b. 350,000
505,500
d.
a.
2. Wh
rec
с.
a.
3. What is the interest expense for 2020 as a result of the
modification?
C.
d.
a. 650,000
b. 450,000
c. 494,505
d. 540,000
8. iv
Problem](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed299dec-bea1-4aeb-9f1c-e9ef017939c2%2Ff159316c-d8d7-4ffa-8940-3acfeaae4015%2Fchtmiv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:management, Tagaytay Highlands Company had negotiated
a restructuring of a 9% P6,000,000 note payable to Second
Bank due on January 1, 2020. There was no accrued interest
Problem 9-17 (IAA)
Due 'to adverse economic circumstances and
poor
on the note on January 1, 2020.
As a resul
First Ban
of P800,00
The bank reduced the principal obligation from P6,000,000
to P5,000,000 and extended the maturity to three years
December 31, 2022.
However, the new interest rate is 13% payable annuall.
every December 31.
The p
The a
The d
Annu
The present value of 1 at 9% for three periods is .77 and the
present value of an ordinary annuity of 1 at 9% for three
periods is 2.53.
Decen
The pres
present
is 3.17.
1. What is the present value of the new note payable on
January 1, 2020?
1. Wha
Janu
a. 6,000,000
b. 5,000,000
c. 5,494,500
d. 3,850,000
b.
2. What is the gain on modification of debt to be recognized
C.
for 2020?
d.
500,000
b. 350,000
505,500
d.
a.
2. Wh
rec
с.
a.
3. What is the interest expense for 2020 as a result of the
modification?
C.
d.
a. 650,000
b. 450,000
c. 494,505
d. 540,000
8. iv
Problem
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