Chris Garcia Bank granted a loan to a borrower on January 1,2021. The interest on the loan is 10% payable annually starting December 31,2021. The loan matures in three years on December 31,2023. Data related to the loan are: Principal amount ₱4,000,000 Origination fees charged against the borrower 342,100 Direct origination cost incurred 150,020 Based on the above data, answer the following: (Round off present value factors to four decimal places) 1. The carrying amount of the loan as of January 1,2021 is a. ₱3,807,920 c. ₱4,192,080 b. ₱4,000,000 d. ₱4,492,120 2. The effective interest rate of the loan is a. 9% c.12% b. 10% d.12.19% 3. The interest income to be recognized in 2021 is a. ₱400,000 c. ₱464,185 b. ₱456,950 d. ₱404,291
Chris Garcia Bank granted a loan to a borrower on January 1,2021. The interest on the loan is 10% payable annually starting December 31,2021. The loan matures in three years on December 31,2023. Data related to the loan are: Principal amount ₱4,000,000 Origination fees charged against the borrower 342,100 Direct origination cost incurred 150,020 Based on the above data, answer the following: (Round off present value factors to four decimal places) 1. The carrying amount of the loan as of January 1,2021 is a. ₱3,807,920 c. ₱4,192,080 b. ₱4,000,000 d. ₱4,492,120 2. The effective interest rate of the loan is a. 9% c.12% b. 10% d.12.19% 3. The interest income to be recognized in 2021 is a. ₱400,000 c. ₱464,185 b. ₱456,950 d. ₱404,291
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 61P
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Chris Garcia Bank granted a loan to a borrower on January 1,2021. The interest on the loan is 10% payable annually starting December 31,2021. The loan matures in three years on December 31,2023. Data related to the loan are:
Principal amount ₱4,000,000
Origination fees charged against the borrower 342,100
Direct origination cost incurred 150,020
Based on the above data, answer the following: (Round off present value factors to four decimal places)
1. The carrying amount of the loan as of January 1,2021 is
a. ₱3,807,920 c. ₱4,192,080
b. ₱4,000,000 d. ₱4,492,120
2. The effective interest rate of the loan is
a. 9% c.12%
b. 10% d.12.19%
3. The interest income to be recognized in 2021 is
a. ₱400,000 c. ₱464,185
b. ₱456,950 d. ₱404,291
4. The carrying amount of the loan as of December 31,2021 is
a. ₱3,864,870 c. ₱4,000,000
b. ₱3,872,105 d. ₱4,496,411
5. The current portion of the loan as of December 31,2021 is
a. Nil c. ₱63,784
b. ₱56,950 d. ₱400,000
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