Loan Receivable and Receivable Financing Activity 1: Problems Problem 1: PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Origination fee charged against the borrower Direct origination costincurred 2,000,000 171,050 75,000 Indirect originationcosts 15,000 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloan is 12.5%. Q1. The carring amount ofthe loan on January 1, 2020: is Q2 Thejournal entries on January 1,2020: Problem 2 LSB granted a loan to the borrower on January 1, 2020. The interest on the loan is 8% payable annually starting December 31, 2020. Theloan matures in three years on December 31, 2022. Principal amount Origination fee charged againstthe borrower Direct origination costincurred 1,500,000 50,000 130,150 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloanis 6%. Q1: the carrying amount ofloan on January 1,2020 is: Q2 the journal entry on January 1, 2020 would be:

Loan Receivable and Receivable Financing Activity 1: Problems Problem 1: PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Origination fee charged against the borrower Direct origination costincurred 2,000,000 171,050 75,000 Indirect originationcosts 15,000 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloan is 12.5%. Q1. The carring amount ofthe loan on January 1, 2020: is Q2 Thejournal entries on January 1,2020: Problem 2 LSB granted a loan to the borrower on January 1, 2020. The interest on the loan is 8% payable annually starting December 31, 2020. Theloan matures in three years on December 31, 2022. Principal amount Origination fee charged againstthe borrower Direct origination costincurred 1,500,000 50,000 130,150 Ater considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloanis 6%. Q1: the carrying amount ofloan on January 1,2020 is: Q2 the journal entry on January 1, 2020 would be:

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 92PSA

See similar textbooks

Similar questions

Everglades Consultants takes out a loan in the amount of $375,000 on April 1. The terms of the loan include a repayment of principal in eight, equal installments, paid annually from the April 1 date. The annual interest rate on the loan is 5%, recognized on December 31. (Round answers to the nearest cent, if needed.) A. Compute the interest recognized as of December 31 in year 1. B. Compute the principal due in year 1.
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Comprehensive Notes Receivable On January 1, 2019, Seaver Company sold land with a book value of 23,000 to Bench Company. Bench paid 15,000 down and signed a 15,000 non-interest-bearing note, payable in two 7,500 annual installments on December 31, 2019, and 2020. Neither the fair value of the land nor of the note is determinable. Benchs incremental borrowing rate is 12%. Later in the year, on July 1, 2019, Seaver sold a building to Hane Company, accepting a 2-year, 100,000 non-interest-bearing note due July 1, 2021. The fair value of the building was 82,644.00 on the date of the sale. The building had been purchased at a cost of 90,000 on January 1, 2014, and had a book value of 67,500 on December 31, 2018. It was being depreciated on a straight-line basis (no residual value) over a 20-year life. Required: 1. Prepare all the journal entries on Seavers books for January 1, 2019, through December 31, 2020, in regard to the Bench note. 2. Prepare all the journal entries on Seavers books for July 1, 2019, through July 1, 2021, in regard to the Hane note. 3. Prepare the notes receivable portion of Seavers balance sheet on December 31, 2019 and 2020.
Note Payable and Accrued Interest Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021. Required: 1. Prepare the entry for this note on September 30, 2020. 2. Prepare the adjusting entry for this note on December 31, 2020. 3. Indicate how the note and the accrued interest would appear on the balance sheet at December 31, 2020. 4. Prepare the entry to record the repayment of the note on March 31, 2021.
Problem 1 (Loans Receivable) Solid bank loan P5 million to a borrower on January 1, 2018. The terms of the loan require principal payments of P1 million each year for five years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. On December 31, 2020, the bank has determined that this remaining principal will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. Question No. 1.1: What is the impairment loss for 2020? Question No. 1.2: What is the carrying amount of the loan receivable on December 31, 2021?
For items 1 to 2 China Bank granted a loan to a borrower on January 1, 2023. The interest rate on the loan is 10% payable annually starting December 31, 2023. The loan matures in five years on December 31, 2027. The data related to the loan are: Principal amount Direct loan origination cost Indirect loan origination cost Origination fee received from borrower P4,000,000 104,410 72,880 526,450 Note: Round-off to four decimal places the PV Factors. The effective interest rate of the loan is? (Round off answer to nearest whole number, e.g. 4%)
What is the carrying amount of the loan receivable on January 1, 2021? Appari Bank granted a loan to a borrower on January 1, 2021. The interest rate on the loan is 10% payable annually starting December 31, 2021. The loan matures in five years on December 31, 2025. Principal amount Origination fee received from borrower Direct origination cost incurred 4,000,000 350,000 61,500 The effective rate on the loan after considering the direct origination cost incurred and origination fe received is 12%. a. 4,000,000 O b. 4,650,000 O c. 4,411,500 O d. 3,711,500
Problem 7-9 (IFRS) Moderate Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Direct origination cost incurred Indirect origination cost incurred Origination fee received from the borrower 5,000,000 100,000 50,000 340,000 After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loa is 12%. 1. What is the carrying amount of the loan receivable on January 1, 2020? a. 4,760,000 b. 5,000,000 c. 4,810,000 d. 4,660,000 2. What is the interest income for 2020? a. 571,200 b. 500,000 c. 476,000 d. 547,200 3. What is the carrying amount of the loan receivable on December 31, 2020? a. 5,000,000 b. 4,760,000 c. 4,831,200 d. 4,910,944 तत 215
Problem 7-2 (IFRS) Awesome Bank granted a loan to a borrower on January 1, 2019. The interest rate on the loan is 10% payable annually starting December 31, 2019. The loan matures in five years on December 31, 2023. Principal amount Direct origination cost Origination fee received from borrower 4,000,000 61,500 350,000 The effective rate on the loan after considering the direct origination cost and origination fee received is 12%. Required: 1. Compute the carrying amount of the loan receivable on January 1, 2019. 2. Prepare a table of amortization for the loan receivable. 3. Prepare the journal entries for 2019 and 2020.
PROBLEM: EB 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. The principal amount of loan is P3,500,000. In addition, direct origination cost incurred amounted to P70,000, and indirect origination cost incurred, P35,000. Finally, origination fee charged against the borrower amounted to P238,000. a) Compute for the carrying amount of the loan receivable on January 1, 2019. b) The new effective rate after considering the origination fees and costs incurred is 12%. Prepare a table of amortization for the loan receivable. c) Prepare journal entries for 2019 and 2021.
Unearned Interest by the Actuarial Method Each loan was paid in full before its due date. (a) Obtain the value of h from the appropriate formula. Then (b) use the actu- arial method to find the amount of unearned interest, and (c) find the payoff amount. 33. 34. Regular Monthly Payment $212 $575 APR 4.7% 5.9% Remaining Number of Scheduled Payments after Payoff 4 8