Siomai ShingSiomaiSha Bank granted a loan to a borrower on January 1, 2019. The interest on the loan is 10% payable annually starting December 31, 2019. The loan matures in three years on December 31, 2021. Principal amount Origination fee charged against the borrower Direct origination cost incurred 4,000,000 342,100 150,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. What is the carrying amount of the loan receivable on January 1, 2019? What amount should be recognized as interest income for 2019? What is the carrying amount of the loan receivable on December 31, 2019? What amount should be recognized as interest income for 2020?
Siomai ShingSiomaiSha Bank granted a loan to a borrower on January 1, 2019. The interest on the loan is 10% payable annually starting December 31, 2019. The loan matures in three years on December 31, 2021. Principal amount Origination fee charged against the borrower Direct origination cost incurred 4,000,000 342,100 150,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. What is the carrying amount of the loan receivable on January 1, 2019? What amount should be recognized as interest income for 2019? What is the carrying amount of the loan receivable on December 31, 2019? What amount should be recognized as interest income for 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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M 13
Transcribed Image Text:SiomaiShingSiomaiSha Bank granted a loan to a borrower on January 1, 2019. The interest on the loan is 10% payable
annually starting December 31, 2019. The loan matures in three years on December 31, 2021.
Principal amount
Origination fee
charged against the
borrower
Direct origination
cost incurred
4,000,000
342,100
150,000
After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective
rate on the loan is 12%.
What is the carrying amount of the loan receivable on January 1, 2019?
What amount should be recognized as interest income for 2019?
What is the carrying amount of the loan receivable on December 31, 2019?
What amount should be recognized as interest income for 2020?
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