ESD Company borrowed 5 million pesos from a bank on September 30, 2015. The loan principal is payable every six months starting march 31, 2016 at the rate of 1,000,000. The loan has an annual interest rate of 10%. Determine the interest expense related to this loan in 2015, 2016,2017 and 2018.

ESD Company borrowed 5 million pesos from a bank on September 30, 2015. The loan principal is payable every six months starting march 31, 2016 at the rate of 1,000,000. The loan has an annual interest rate of 10%. Determine the interest expense related to this loan in 2015, 2016,2017 and 2018.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jhar Industries has borrowed $125,000 under a line-of-credit agreement. While the company normally maintains a checking account balance of $15,000 in the lending bank, this credit line requires a 20% compensating balance. The stated interest rate on the borrowed funds is 10%. Show Solutions and Explanation. A. What is the effective annual rate of interest on the line of credit? (Format: 11.11%)
Metrobank made a $2,000,000, 8% loan on January 1, 2018. The $160,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. By the end of 2018, the first year's interest of $160,000 has not been received yet because the borrower is experiencing financial troubles. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5 year loan term. In addition, the amount of principal repayment will be dropped from $2,000,000 to $1,200,000. The Present Value of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 2018 in connection with the loan. What is the loan impairment loss for 2018?
Today is June 1. Sustainable Corporation has an obligation of $25 million coming due on August 1. The company is planning to borrow this amount on August 1 to fulfill its obligation, and plans to pay back the loan on December 1. The company’s borrowing rate is LIBOR + 125 basis points. The company’s bank presents it with the following LIBOR term structure: # days LIBOR 30 0.90% 60 1.00% 90 1.05% 120 1.10% 150 1.15% 180 1.18% 210 1.20% 240 1.21% For the calculation of interest, the bank assumes 30 days in a month, and 360 days in a year. Ms. Devro, the VP Finance of Sustainable, is worried that LIBOR will increase between June and August, thus increasing the company’s borrowing cost. She advises that the company enters into a forward rate agreement (FRA) with its bank to hedge its interest rate risk. She has asked you, the treasurer of the company, to present her with answers to the following questions: c. July 1 is the end…
On Jan 1st, 2022, Saturn borrows $2,000,000 from Orange Bank and pledges $2,500,000 of its accounts receivables as collateral. Saturn pays a 1% finance fee for the borrowing and the interest is 8% on the note. Record the journal entry on Jan 1st, 2022.
On September 1, 2015, Newtown borrowed $250,000 from First National Bank, and signed a 9% note payable due in one year. Interest on the note is due at maturity. Required: Please show calculations Part a. Prepare the journal entry to record the borrowing transaction. Part b. Prepare the required adjusting entry on December 31, 2015. Part c. Prepare the journal entry to record the payment of the interest on September 1, 2016. Part d. Prepare the journal entry to record the payment of the note on September 1, 2016.
The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings using short-term notes payable. On June 30, they borrowed $10,900 that they planned to use to purchase new office equipment, the interest rate on the note was 6% with both interest and principal repayable in 6 months (December 31st). On October 1st, the company financed the purchase of a used vehicle costing $65,400 using a 12 month note payable at 8% with interest payments due quarterly and the principal amount due at maturity. The company's year end is December 31st. Record the journal entries for the issuance of both notes and any interest entries that need to be made up to and including December 31, 2024. Assume that no interest expense was accrued during the year. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account…
A note of P 55,000 dated January 1, 2015 is due in 5 years and 6 months with interest at 9% compounded quarterly. On July 1, 2017, the holder of the note has it discounted by a lender who charges 8 ½ % converted semi-annually. What are the proceeds?
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Suicune Bank granted a P5,000,000 loan to Raikou Company on January 1, 2020. The annual interest on the loan is 8% payable semi-annually. The loan matures in three years on December 31, 2022. The effective interest rate on the loan is 6%. How much is the carrying amount of the loan as of December 31, 2020?

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