Maris Banking Corporation granted a loan to a borrower on January 1, 2020. The interest rate on the loan is 10% payable annually starting December 31, 2020. The loan matures in five years on December 31, 2025. The data related to the loan are:   Principal amount 6,000,000 Direct origination cost 92,250 Origination fee received from borrower 525,000 Indirect origination cost 100,000   The effective rate on the loan after considering the direct origination cost and origination fee received is 12%. What is the carrying amount of loans receivable on December 31, 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Maris Banking Corporation granted a loan to a borrower on January 1, 2020. The interest rate on the loan is 10% payable annually starting December 31, 2020. The loan matures in five years on December 31, 2025. The data related to the loan are:

 

Principal amount 6,000,000

Direct origination cost 92,250

Origination fee received from borrower 525,000

Indirect origination cost 100,000

 

The effective rate on the loan after considering the direct origination cost and origination fee received is 12%. What is the carrying amount of loans receivable on December 31, 2021?

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