On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189

On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

See similar textbooks

Similar questions

On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
On January 1, 20x1, an entity obtains an 11%, P5,000,000 bank loan. The bank charges the entity an 8.74% nonrefundable loan origination fee. The principal on the loan matures on December 31, 20x4 but interest is due annually every December 31. Requirements: Compute for the initial carrying amount of the loan. Compute for the effective interest rate on the loan. Compute for the carrying amount of the loan on December 31 20x1.
21. On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189 REQUIRED: Provide a step-by-step solution.
21. On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189 REQUIRED: Provide a step-by-step solution. NOTE: The answer should be the same with the given, I have already asked and they answered 982,144. I need the process that has the answer, P982,189.
1. Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is required to pay 15% interest annually every December 31, from 20A until the principal is extinguished. Client ME has to make an equal annual principal payment of its obligation to commence December 31, 20A. An amount of P61,192 was paid by Client ME as its share from the origination fee totaling P161,192, and the rest was shouldered by the bank resulting to a 14.50% new effective interest rate. On December 31, 20A, the non-current portion of the loan receivable is
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. 1,520,000
on jan 1 20x1, Sore bank extended a 5,000,000, 10% loan to a borrower. The principal is due in 4 years time but interest is due annually every Dec. 31. Sore bank incurred direct loan origination costs of 261,986 and charged the borrower origination fee of 2%. Compute for the carrying amounts of the loan on Jan. 1 , 20x1. and Dec 31 20x1, respectively.
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?
On January 1, 20x1, SUBDUE Co. borrowed 10%, P4, 000, 000 loan from CONQUER Bank. Principal is due on January 1, 20x4 but interests are due annually starting January 1, 20x2. SUBDUE was charged by the bank a 3% nonrefundable loan origination fee representing service fee. How much is the carrying amount of the note on initial recognition?
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? a. 1,440,000 O b. 1,480,000 O c. 1,500,000 d. 1,520,000
11. Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is required to pay 15% interest annually every December 31, from 20A until the principal is extinguished. Client ME has to make an equal annual principal payment of its obligation to commence December 31, 20A. An amount of P61,192 was paid by Client ME as its share from the origination fee totaling P161,192, and the rest was shouldered by the bank resulting to a 14.50% new effective interest rate. On December 31, 20B, how much should AA’s income from this loan?