What is the carrying amount of the loan receivable on December 31, 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projecte the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projectec cash flows are: Date of cash flow Amount projected on December 31, 2021 500,000 1,000,000 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 2,000,000 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 7,000,000 O b. 5,449,600 c. 4,860,000 O d. 5,949,600

What is the carrying amount of the loan receivable on December 31, 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projecte the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projectec cash flows are: Date of cash flow Amount projected on December 31, 2021 500,000 1,000,000 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 2,000,000 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 7,000,000 O b. 5,449,600 c. 4,860,000 O d. 5,949,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Required: Round interim calculations to four decimals and final answers to the nearest dollar.…

A: Present Value-Present value is the concept that states that an amount of money today is worth more…

Q: On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October…

A: Ordinary interest is a type of interest that is calculated based on the original principal amount of…

Q: At January 1, 2021, BB Industries, Inc., owed Second Bank $24 million, under a 10% note due December…

A: Sometimes there will arise a situation that borrower will not be able to pay the bank the principal…

Q: What amount of the payment made on January 1, 2022 will be interest expense?

A: Amount Borrowed = $360000 Interest Rate = 4% Fixed Annual Payment = $32379 Interest to be paid on…

Q: What is the amount of loan extended to MAPCD Co

A: An extended loan means when the amount of the loan is increased by the lender of the loan. the note…

Q: On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a…

A: Notes are the financial instruments which are quite similar to bond as they have maturity period and…

Q: Sheridan Inc. provided several entertainment services to Flint Corporation in the past. On January…

A: As per the given information: Period of note payable - 2 yearsAmount of non-interest bearing note…

Q: Yolo Corporation experienced financial difficulty in 2020. It decided to go into note receivable…

A: Journal Entries- Journal entries are the visual representation of business transactions. A general…

Q: What is the forecasted interest expense on Comfy Homes 2018 pro forma financial statements? When the…

A: Here's a detailed calculation for better understanding. To forecast the interest expense for Comfy…

Q: On January 1, 2021, Saltimbocca Corporation borrowed $192,772 from Morgan Stanley. Under the terms…

A: The question demands the interest expense for the third year of the loan. In order to determine…

Q: On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a…

A: In finance, the term promissory note represents a written document in which one person promises to…

Q: The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings…

A: Under the accrual method of accounting, the revenue or expense is recorded based on the accrual of…

Q: On January 1, 2025, Marin Company loans $378,765 to Cullumber Corporation in exchange for a $450,000…

A: Zero interest-bearing notes are issued at a discount. Zero interest-bearing note does not pay…

Q: ABC Corp. signed a notes payable with DEF Inc. on June 1, 2021. The note providesthat ABC Corp. must…

A: The problem is asking us to find out how much ABC Corp. borrowed from DEF Inc. on June 1, 2021. We…

Q: Required: Prepare the journal entries by Mahmoud Industries, Incorporated, necessitated by the…

A: Debt restructuring may be classified as troubled debt restructuring or non-troubled debt…

Q: DBC Company has received a confirmation letter from the First National Bank of Miami (FNBM) about a…

A: 1) Prepare a table calculating average used balance, interest rate applicable, interest on unused…

Question

What is the carrying amount of the loan receivable on December 31, 2022?
Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were
payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was
made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was
unable to make the 2021 interest payment. Beach Company considered the loan impaired and projected
the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31,
2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projected
cash flows are:
Date of cash flow
Amount projected
on December 31, 2021
December 31, 2022
500,000
1,000,000
December 31, 2023
December 31, 2024
December 31, 2025
2,000,000
4,000,000
The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four
periods.
a. 7,000,000
b. 5,449,600
c. 4,860,000
d. 5,949,600

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Durango, Inc. borrowed $20,000 on October 1, 2020. Durango will not make any payments on this loan until October 1, 2023, and at that time Durango will owe $26,000. What will be the amounts shown on Durango's annual financial statements at December 31, 2022? O Interest expense of $2,000 and interest payable of $4,500 Interest expense of $4,500 and interest payable of $4,500 O Interest expense of $4,500 and interest payable of $1,500 Interest expense of $2,000 and interest payable of $1,500 O None of the above
At January 1, 2018, Brainard Industries, Inc., owed Second BancCorp $12 million under a 10% note due December 31, 2020. Interest was paid last on December 31, 2016. Brainard was experiencing severe financial difficultiesand asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorpagreed to:a. Forgive the interest accrued for the year just ended.b. Reduce the remaining two years’ interest payments to $1 million each and delay the first payment untilDecember 31, 2019.c. Reduce the unpaid principal amount to $11 million.Required:Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at (1) January1, 2018; (2) December 31, 2019; and (3) December 31, 2020.
What is the forecasted current portion of bank loan on comfy homes 2018 pro forma financial statements. The $45000 current portion of the bank loan will be paid in December 31, 2018. Of the $255000 in long term debt, another $45000 comes due on December 31, 2019. Comfy home does not plan to obtain any additional loans in 2018. The interest rate for comfy homes borrowing has declined to 6%. It is expected to be the average rate of interest for comfy home short and long term borrowings in 2018. Revenues believe to increase 30% in 2018.
On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October 1, 2020, and carries a 5.40% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent.