On June 1, 2008, Dara Corporation loaned Irvin P20,000,000 on a 12% note, payable in five annual installments of P4,000,000 beginning January 2, 2009. In connection with this loan, Irvin was required to deposit P2,000,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Irvin after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2008. Irvin made timely payments through November 1, 2008. On January 2, 2009, Dara received payment of the first principal installment plus all interest due. At December 31, 2008, Dara's interest receivable on the loan to Irvin should be
On June 1, 2008, Dara Corporation loaned Irvin P20,000,000 on a 12% note, payable in five annual installments of P4,000,000 beginning January 2, 2009. In connection with this loan, Irvin was required to deposit P2,000,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Irvin after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2008. Irvin made timely payments through November 1, 2008. On January 2, 2009, Dara received payment of the first principal installment plus all interest due. At December 31, 2008, Dara's interest receivable on the loan to Irvin should be
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 1, 2008, Dara Corporation loaned Irvin P20,000,000 on a 12% note, payable in five annual installments of P4,000,000 beginning January 2, 2009. In connection with this loan, Irvin was required to deposit P2,000,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Irvin after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2008. Irvin made timely payments through November 1, 2008. On January 2, 2009, Dara received payment of the first principal installment plus all interest due. At December 31, 2008, Dara's interest receivable on the loan to Irvin should be
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