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Problem 9-19 (IFRS) January P600,000. As a result of a restructuring agreement on 1, 2021, the creditor agreed to the following concessions a. Accrued interest of P600,000 is forgiven. b. The new principal is P4,000,000. e. The entity paid P350,000 as an arrangement fee to . creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The Pv of 1 at 14% for 3 periods is 0.67 and the PV of an ordinan annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? a. 3,363,200 b. 3,013,200 c. 2,652,400 d. 3,002,400 3. What amount should be reported as interest expense fo: the 2021? a. 453,152 b. 394,760 c. 359,760 d. 240,000 4. What is the carrying amount of the new note payable o December 31, 2021? a. 3,449,952 b. 4,000,000 c. 3,786,848 d. 3,689,952

Problem 9-19 (IFRS) January P600,000. As a result of a restructuring agreement on 1, 2021, the creditor agreed to the following concessions a. Accrued interest of P600,000 is forgiven. b. The new principal is P4,000,000. e. The entity paid P350,000 as an arrangement fee to . creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The Pv of 1 at 14% for 3 periods is 0.67 and the PV of an ordinan annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? a. 3,363,200 b. 3,013,200 c. 2,652,400 d. 3,002,400 3. What amount should be reported as interest expense fo: the 2021? a. 453,152 b. 394,760 c. 359,760 d. 240,000 4. What is the carrying amount of the new note payable o December 31, 2021? a. 3,449,952 b. 4,000,000 c. 3,786,848 d. 3,689,952

FINANCIAL ACCOUNTING
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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Problem 9-19 (IFRS) P600,000. As a result of a restructuring agreement on 1, 2021, the creditor agreed to the following concessions January a. Accrued interest of P600,000 is forgiven.. b. The new principal is P4,000,000. c. The new interest rate is 6% payable every December a. e. The entity paid P350,000 as an arrangement fee to creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The Dy of 1 at 14% for 3 periods is 0.67 and the PV of an ordinary annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? а. 3,363,200 b. 3,013,200 c. 2,652,400 d. 3,002,400 3. What amount should be reported as interest expense for the 2021? a. 453,152 b. 394,760 с. 359,760 d. 240,000 4. What is the carrying amount of the new note payable on December 31, 2021? a. 3,449,952 b. 4,000,000 с. 3,786,848 d. 3,689,952 316
Transcribed Image Text:Problem 9-19 (IFRS) P600,000. As a result of a restructuring agreement on 1, 2021, the creditor agreed to the following concessions January a. Accrued interest of P600,000 is forgiven.. b. The new principal is P4,000,000. c. The new interest rate is 6% payable every December a. e. The entity paid P350,000 as an arrangement fee to creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The Dy of 1 at 14% for 3 periods is 0.67 and the PV of an ordinary annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? а. 3,363,200 b. 3,013,200 c. 2,652,400 d. 3,002,400 3. What amount should be reported as interest expense for the 2021? a. 453,152 b. 394,760 с. 359,760 d. 240,000 4. What is the carrying amount of the new note payable on December 31, 2021? a. 3,449,952 b. 4,000,000 с. 3,786,848 d. 3,689,952 316
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