Use the information presented below in answering questions 11-15. On December 31, 2018, Tina Company, a financing institution lent P4,000,000 to Erika Corporation due three years after. The loan is supported by an 6% note receivable. Transaction costs incurred to originate the loan amounted to P100,000, P466,557 was chargeable to Erika as origination fees. Interest on the loan are collectible at the end of each year. The yield rate on the loan is 11%. Tina was able to collect interest as it became due at the end of 2019 and 2020. During 2021, however, due to Erika Corporation’s business deterioration and due to political instability and faltering global economy, the company was not able collect amounts due at the end of 2021. After reviewing all available evidence at December 31, 2021. Tina determined that it was probable that Erika would pay back only P2,500,000 is collectible as follows: December 31, 2023 0.5M December 31, 2024 1M December 31, 2025 0.6M December 31, 2026 0.4M As of December 31, 2021, the prevailing rate of interest for all debt instrument is 12%. PV factor – complete. 11. What is the carrying value of loans receivables as of December 31, 2020? 3,439,710 2,864,865 2,741,655 None of the above 12. What is the impairment loss to be recognized in the 2021 Statement of Comprehensive Income? 1,410,378 1,230,378 2,048,456 None of the above 13. What is the interest income to be recognized in the 2022 SOCI? Option 1 189,052 Option 2 216,071 Option 3 184,839 None of the above
Use the information presented below in answering questions 11-15.
On December 31, 2018, Tina Company, a financing institution lent P4,000,000 to Erika Corporation due three years after. The loan is supported by an 6% note receivable. Transaction costs incurred to originate the loan amounted to P100,000, P466,557 was chargeable to Erika as origination fees. Interest on the loan are collectible at the end of each year. The yield rate on the loan is 11%.
Tina was able to collect interest as it became due at the end of 2019 and 2020. During 2021, however, due to Erika Corporation’s business deterioration and due to political instability and faltering global economy, the company was not able collect amounts due at the end of 2021. After reviewing all available evidence at December 31, 2021. Tina determined that it was probable that Erika would pay back only P2,500,000 is collectible as follows:
December 31, 2023 0.5M
December 31, 2024 1M
December 31, 2025 0.6M
December 31, 2026 0.4M
As of December 31, 2021, the prevailing rate of interest for all debt instrument is 12%. PV factor – complete.
11. What is the carrying value of loans receivables as of December 31, 2020?
3,439,710
2,864,865
2,741,655
None of the above
12. What is the impairment loss to be recognized in the 2021 Statement of Comprehensive Income?
1,410,378
1,230,378
2,048,456
None of the above
13. What is the interest income to be recognized in the 2022 SOCI?
Option 1 189,052
Option 2 216,071
Option 3 184,839
None of the above
14. What is the correct carrying value of the loans receivable as of December 31, 2024?
865,190
1,131,410
1,680,351
None of the above
15. What is the interest income to be recognized in 2025?
39,640
95,171
87,504
None of the above
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