Royal Bank granted a loan to a borrower on January 1, 2019. The interest rate on the loan is 8% payable annually starting December 31, 2019. The loan matures in five years on December 31, 2023. The data related to the loan are: Principal amount P3,000,000; Direct origination cost incurred P160,920; Origination fee received from borrower P300,000; Indirect origination costs incurred P35,000; The effective rate on the loan after considering the direct origination cost and origination fee received is 12%.

Royal Bank granted a loan to a borrower on January 1, 2019. The interest rate on the loan is 8% payable annually starting December 31, 2019. The loan matures in five years on December 31, 2023. The data related to the loan are: Principal amount P3,000,000; Direct origination cost incurred P160,920; Origination fee received from borrower P300,000; Indirect origination costs incurred P35,000; The effective rate on the loan after considering the direct origination cost and origination fee received is 12%.

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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