National Bank granted a 10-year loan to Abbo Company in the amount of P1,500,000 with a stated interest rate of 6%. Payments are due monthly and are computed to be P16,650. National Bank incurred a P40,000 of direct loan origination cost and P20,000 of indirect loan origination cost. In addition, National Bank charged Abbo Company a 4-point nonrefundable loan origination fee. What is the initial carrying amount of the loan payable on the part of Abbo Company? O a. 1,440,000 O b. 1,480,000 O c. 1,500,000 O d. 1,520,000
Q: On December 31, 20x3, the carrying value of the loan receivable is approximately
A: Interest is the periodic obligation of the borrower to pay towards the sum borrowed. It is computed…
Q: Roth Company received from a customer a one-year, P500,000 note bearing an annual interest of 8%.…
A: Maturity value of note = Face value of note + interest = P500000 + 500000*8%*12/12 = P540000
Q: Acosta holdings borrowed P9000 from smith corporation on January1, 1998 and P12000 on January…
A: It is process where loan amount is paid over a time so that initial loan repaid over time.
Q: DAMIPERA Corporation, a lending institution, provided a loan to LAPERA Company for Php5,000,000 on…
A: On 01.01.2020, DAMIPERA corporation provided loan to LAPERA company = Php5000000 Loan term = 5 years…
Q: On October 31, 2020, JP Company engaged in the following transactions: Obtained a P500, 000, six…
A: Here account receivable is given as pledge upto P500000
Q: On April 1, 2021, JPG Company sold for P84,000 a stereo which paid had a cost of P54,600. A down…
A: Sales value = P84,000 Cost = P54,600 Down payment = P9,000 Additional payment = P7,500 × 4 months…
Q: Hope Corp. sells a franchise for an initial fee of P1,400,000. A down payment of P400,000 is…
A: When the capability of note is reasonably assured, the journal entry would be debit of cash and…
Q: Quick Print Press borrowed $20,000 from the Provincial Bank on May 25 at 7.5% and secured the loan…
A: 25-May Loan Amount $ 20,000.00 Interest Rate 7.50% 10-Jul Partial…
Q: National Bank granted a 10-year loan to BBB Company in the amount of P1,500,000 with a stated…
A: Notes can be defined as a financial security which provides interest to its holder. To deal in…
Q: Stephens Metals Company has a revolving credit agreement with its bank permitting it to borrow up to…
A: With the given information, we can determine the annual finance cost of borrowing $20 million under…
Q: A company has a $500,000 30 year fixed loan payable at an interest rate of 4% monthly loan payments…
A: The entry for first month loan payment are as follows
Q: On January 1, 2021, Tina Bank extended a 5-year, 12%, P5,000,000 loan to Mr. Prospecio. Principal is…
A: Business loans- A business loan, also known as a commercial loan, is a type of financing used to…
Q: Gingerbread Corp was issued a $250,000 loan at 8% with a five year maturity date. The partial…
A: Given: Loan = $250,000 Interest rate =8% Years = 5
Q: On January 1, 2014, ABC Company, a calendar-year firm, gave a loan to XYZ Enterprises amounting to…
A: SOLUTION CARRYING VALUE IS AN ACCOUNTING MEASURE OF VALUE IN WHICH THE VALUE OF AN ASSET OR COMPANY…
Q: Tam's Pizza, Inc. charges an initial franchise fee of P50,000 for the right to operate as a…
A: From the perspective of the Franchisor to earn the amount of revenue from the franchise contract…
Q: Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after…
A: Loan given by bank to its customer is treated as Financial Asset for bank and it will be a financial…
Q: Jones Corporation borrowed P9, 000 from Brown Corporation on Jan. 1, 1978 and P12, 000 on Jan. 1,…
A: Present Value Present value is the present worth of any sum of money to be received in the future at…
Q: Mika Company secured a one-year bank loan of P8,000,000 on October 1, 2010. The loan is discounted…
A: Loan Amount = P 8,000,000 Discount Rate = 10 % Repayment = Due after one year
Q: A factory operator bought a Diesel generator set for P1,000.000.00 and agreed to pay the supplier…
A: Note: It is assumed that the Price at which Diesel Generator was bought is P1,000,000 and…
Q: Black Corporation has entered into a long-term assignment agreement with a finance company. Under…
A: The question is related to Journal Entries for the loan against accounts receivables.
Q: Bulldogs Inc. loaned a certain amount from a reputable bank for a term of one year at 8% quoted rate…
A: Compensating loan is a provision that the bank asks the loan taker to maintain as a security when…
Q: borrowing. BB gave a 14% note for P450,000 representing 90% of the assigned accounts and received…
A: In our question, BB Corp. has borrowed the loan amount of P 500,000 from Finance Company. So in the…
Q: determine the lump-sum amount to be paid at the end of the loan period.
A: Amount: It is the sum of money to be paid at the end of the period. This sum of money also includes…
Q: BPI granted a 10-year loan to a borrower in the amount of ₱1,500,000 with stated interest rate of…
A: Notes can be defined as a financial security which provides interest to its holder. To deal in…
Q: SIX Company, a lending institution lent P2,000,000 at 8.0000% per annum, to LAMANEH, Inc. The loan…
A: Financial instruments are contracts that can be bought, sold, created, modified, or settled for…
Q: Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is…
A: A contra account is used in a general ledger to reduce the value of a connected account when the two…
Q: On February 1, 20x1, TSR Co. sold machinery with historical cost of P3,000,000 and accumulated…
A: A debt with no stated interest rate is known as a noninterest-bearing note. However, a…
Q: Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company…
A: Gingerbread Corp was issued a $220,000 loan at 6%. they are paying annual instalment amount to 44740…
Q: Sanchez corporation borrowed a working capital from Barroga Corporation for two consecutive years –…
A: A loan is a sum of money obtained from outside sources such as banks for a specific length of time…
Q: An entity sells goods for ₱150,000 to a customer who was granted a special credit period of 1 year.…
A: The initial measurement of the receivable is represented by the nominal value of the receivable net…
Q: ABC Bank granted a loan to a client on January 1, 20x1. The interest on the loan is 10% payable…
A: Effective Interest rate: It is the rate at which initial carrying amount of the loan receivable is…
Q: ABC Company borrows $497,000 from the bank at 7% for a three year period on Jan. 01. The loan will…
A: As per IFRS 9 Financial instruments, Borrowing from bank will be considered as Financial liability…
Q: Kirk Company purchased equipment by making a down payment of P400,000 and issuing a note payable for…
A: Capitalized cost of the equipment = Down payment + Present value of Note + Shipping charges +…
Q: Cranes Limited took a loan of $ 450,000 at 4% compounded monthly from its bank to train its…
A: When the loans are repaid in periodic instalments, each periodic instalment have 2 components i.e.…
Q: Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest…
A: Working :-…
Q: Bowl Corporation has obtained a line of credit facility of $1 million from Plate Bank at 6% interest…
A: Line of credit: A line of credit is typically a short-term loan that a firm can avail of from a…
Q: What is the interest income and carrying amount of the loans receivable on March 31, 2010?
A: Interest can be defined as the amount being computed for the loans received for granted. It is to be…
Q: Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000…
A: Given Purchase cost = 15000 The present value of an ordinary annuity of $1 at 5% for 10 periods…
Q: PELLUCID CLEAR Oo. has a 10%, P2,000,000 loan payable as of December 31, 20x1 which is maturing on…
A: Liability means any amount which a business owes to others, creditors, suppliers etc. Liability can…
Q: Required: Based on the result of your audit, determine the following: __________1. Realized income…
A: Given Face value of Grant - P1,000,000 Implicit rate = 10% Term = 3 Years PVF @10% for 3 years =…
Q: A company borrows $60,000 by signing a $60,000, 8% 6-year note that requires equal payments of…
A: Principal amount is the initial size of the loan or borrowing amount, or could be the amount which…
Q: Dove granted an 8%, 3-year ₱6,000,000 loan to Crow Company on January 1, 2020. The interest on the…
A: Following is the answer to the given question
Q: TNT Construction borrowed $150,000 at 7.26% compounded annually and signed a contract with the…
A: Solution:- When an amount is borrowed, the borrower has the option whether to repay it in lump sum…
Q: On January 1st, 20x0 "ABC" Company borrowed $150,000 for 4.00 years from a local bank. According to…
A: The interest paid over the term of a loan can be computed by deducting the amount borrowed from the…
Q: A fully secured loan of P30,000 was to be amortized by 10 equal semi-annual payments, the first…
A: Loan amount (L) = P 30000 Total payments (n) = 10 r = 12% per annum = 6% semiannually Let semiannual…
Q: On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1,…
A: Loan given by bank to its customer is treated as Financial Asset for bank and it will be a financial…
Q: On January 1, 2014, Fabco borrowed $5,000,000 from First Bank of Newburg. The loan had a term of…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
- National Bank granted a 10-year loan to Abbo Company in the amount of P1,500,000 with a stated interest rate of 6%. Payments are due monthly and are computed to be P16,650. National Bank incurred a P40,000 of direct loan origination cost and P20,000 of indirect loan origination cost. In addition, National Bank charged Abbo Company a 4-point nonrefundable loan origination fee. What is the initial carrying amount of the loan receivable on the part of National Bank? a. 1,440,000 O b. 1,480,000 O c. 1,500,000 d. 1,520,000Bulldogs Inc. loaned a certain amount from a reputable bank for a term of one year at 8% quoted rate for a principal of P415,000. Out of the face value of the loan, only P375,000 can be used due to the provision of a compensating balance. What is the effective rate of interest and the compensating balance? A. 8%; 33,200 B. 8%; 40,000 C. 8.55%; 33,200 D. 8.85%; 40,000FIVESIX Company, a lending institution lent P2,000,000 at 8.0000% perannum, to LAMANEH, Inc. The loan is payable after 5 years. Thecompany incurred direct origination costs of P200,000 and indirectorigination costs of P50,000. The company also charged origination feesto the borrower amounting to P295,000.The implicit interest rate on this loan is 9.2284%How much is the initial carrying value of the loan receivable?
- Vaughn Manufacturing assigns $7300000 of its accounts receivables as collateral for a $2.64 million 9% loan with a bank. Vaughn Manufacturing also pays a finance fee of 2% on the transaction upfront. What would be recorded as a gain (loss) on the transfer of receivables?BPI granted a 10-year loan to a borrower in the amount of ₱1,500,000 with stated interest rate of 6%. Payments are due monthly and are computed to be ₱16,650. The bank incurred ₱40,000 of direct loan origination cost and ₱20,000 of indirect loan origination cost. In addition, the bank charged the borrower a 4-point nonrefundable loan origination fee. What is the carrying amount of the loan receivable to be reported initially by the bank?Megabank granted an 8% 3-year loan to Global Company on January 1, 2018. The interest on the loan is payable every December 31. Megabank incurred P148,122 of direct origination cost but an origination fee of P300,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 9%. What is the amortized cost of the loan on December 31, 2019 in Megabank's accounting book ?
- Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest on the loan is payable every December 31. Megabank incurred P 520,600 of direct origination cost but an origination fee of P 200,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 6%. No. QUESTIONS Your Answer 1. What is the carrying value of the loan receivable on January 1, 2021 in Megabank's accounting books? 2. What is the carrying value of the loan receivable on December 31, 2023 in Megabank's accounting books?On Jan. 1, 2021, XYZ Bank extended a 3-year 5,000,000 loan to ABC Corporation. The interest rate agreed upon is 7%. The bank incurred direct and indirect origination costs of 75,100 and 50,000 respectively, but collected origination fees of 328,230 from ABC. The effective interest rate is 9%. What is the total receivable related to the loan to ABC on Dec. 31, 2021?a. Abc Investment Ltd., plans to borrow Ghc100,000 for a 90-day period from Lloyds Finance Company. Abc investment would repay the principal amount plus Ghc5,000 interest at maturity. Determine and calculate the Annual Percentage Rate of the credit to Abc Company Ltd. b. Belinda Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The company’s current assets consist of inventory and trade receivables. Current liabilities consist of accounts payables and an overdraft facility with an average interest rate of 10% per annum. The company gives 60 days credit to its customers and is allowed an average of 30 days credit by trade suppliers. The company has an operating cycle of 90 days. Other relevant information: Current ratio of Ait Ltd 1.5:1 Cost of long-term finance to Ait Ltd is 12% per annum Required: Calculate the, (i) Size of the overdraft of Ait Ltd (ii) Net working capital of the company (iii) Total cost of financing its current assets c.…
- Brothers Corporation borrows P70,000.00, annual interest rate of 19% is deducted in advance. What is the amount of proceeds the company will receive at the time of the loan and what is the effective interest rate choose the letter of the correct answera. P13,300.00 and 19%b. P26,700.00 and 19%c. P13,300 and 23.5%d. P23,300.00 and 19%e. P56,700.00 and 23.5%1. Eastwest Bank extended a 3-year $5,000,000 loan to Nick Company on January 1, 2020. The interest rate agreed upon is 7%. The bank incurred direct and indirect origination costs of $75,100 and $50,000 respectively, but collected origination fees of $328,230 from Nick Company. The effective interest rate is 9%. On December 31, 2020, how much is the total receivable related to the loan to Nick Company? 2. On January 2, 2019, Anne Inc. sold equipment which has a carrying amount of $400,000 in exchange for a $600,000 4-year non-interest-bearing note that will be due on January 2, 2023. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type on January 2, 2019 was 10%. What should be recorded as the carrying value of the note receivable as of December 31, 2021 balance sheet?Sanchez corporation borrowed a working capital from Barroga Corporation for two consecutiveyears – Php 101250 and Php 105621, on January 1, 1996 and January 1, 1997, respectively. Sanchezcorporation made a partial payment of Php 79200 on January 1, 2000 and agreed with the lender thatthe balance of the loan would be amortized by 9 equal payments. The interest rate of the loan is12.5% compounded semiannually. Find the amount of each payment.