Problem 7-8 (IFRS) to a On January 1, 2021, Global Bank loaned P3,000,000. 6-year borrower. The contract specified that the loan had a term and a 9% interest rate. Interest is collected for 2021. has a 12-month probability of default of 2% and expected t collect only 90% of the loan. On December 31, 2022, the bank determined that there is significant increase in the credit risk of the loan but ne objective evidence of impairment. Based on relevant information, the bank concluded that there is a 30% probability of default over the remaining term of the loan and it is expected that only 60% of the loan will be collected. Interest is collected for 2022. On December 31, 2023, the borrower was under financial difficulty and the loan was considered impaired. The bank agreed that only 40% of the principal will be collected on due date. Interest is collected for 2023. The present value of 1 at 9% is 0.65 for 5 periods, 0.71 for four periods and 0.77 for three periods. Required: 1. Prepare the journal entries for 2021, 2022 and 2023. 2. Compute the carrying amount of the loan receivable on December 31, 2021, 2022 and 2023. 3. Prepare the journal entries for 2024, 2025 and 2026.

Problem 7-8 (IFRS) to a On January 1, 2021, Global Bank loaned P3,000,000. 6-year borrower. The contract specified that the loan had a term and a 9% interest rate. Interest is collected for 2021. has a 12-month probability of default of 2% and expected t collect only 90% of the loan. On December 31, 2022, the bank determined that there is significant increase in the credit risk of the loan but ne objective evidence of impairment. Based on relevant information, the bank concluded that there is a 30% probability of default over the remaining term of the loan and it is expected that only 60% of the loan will be collected. Interest is collected for 2022. On December 31, 2023, the borrower was under financial difficulty and the loan was considered impaired. The bank agreed that only 40% of the principal will be collected on due date. Interest is collected for 2023. The present value of 1 at 9% is 0.65 for 5 periods, 0.71 for four periods and 0.77 for three periods. Required: 1. Prepare the journal entries for 2021, 2022 and 2023. 2. Compute the carrying amount of the loan receivable on December 31, 2021, 2022 and 2023. 3. Prepare the journal entries for 2024, 2025 and 2026.

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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