Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Question
Chapter 3, Problem 80P
To determine
Ascertain the amount of interest income that must be recognized by Company F on each of the following loans.
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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.
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
B. MATATAG Bank loaned P5,000,000 to a borrower on January 1, 2019. The term of the
loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%.
The first principal and interest payment is due on January 1, 2020. The borrower made
the required payments during 2020 and 2021.
However, during 2021 the borrower began to experience financial difficulties, requiring
the bank to reassess the collectability of the loan.
On December 31, 2021, the bank has determined that the remaining principal payment
will be collected as originally scheduled but the collection of the interest is unlikely.
The bank did not accrue the interest on December 31, 2021.
Present value of 1 at 8%
0.926
For one period
For two periods
For three periods
0.857
0.794
1. What is the impairment loss for 2021?
а. 423,000
b. 217,000
c. 222,000
d. 0
2. What is the interest income for 2022?
a. 126,160
b. 142,640
c. 240,000
d. 0
3. What is the carrying amount of the loan receivable on December 31,…
Chapter 3 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Are all losses realized on the sale of capital...Ch. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - How much taxable income should each of the...Ch. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 39PCh. 3 - Prob. 40PCh. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Prob. 43PCh. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Devi is the chief executive officer of Nishida...Ch. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55PCh. 3 - Prob. 56PCh. 3 - Prob. 57PCh. 3 - Prob. 58PCh. 3 - Prob. 59PCh. 3 - Prob. 60PCh. 3 - Prob. 61PCh. 3 - Prob. 62PCh. 3 - Determine whether the taxpayer has income that is...Ch. 3 - Prob. 64PCh. 3 - Prob. 65PCh. 3 - Prob. 66PCh. 3 - Prob. 67PCh. 3 - Prob. 68PCh. 3 - Prob. 69PCh. 3 - Prob. 70PCh. 3 - Prob. 71PCh. 3 - Prob. 72PCh. 3 - Prob. 73PCh. 3 - Prob. 74PCh. 3 - Prob. 75PCh. 3 - Prob. 76PCh. 3 - During the last five months of the year, Dwana...Ch. 3 - Prob. 78PCh. 3 - Prob. 79PCh. 3 - Prob. 80PCh. 3 - Prob. 81PCh. 3 - Lorene, Inc., owns an apartment complex. The terms...Ch. 3 - Prob. 83PCh. 3 - Prob. 84PCh. 3 - Prob. 85PCh. 3 - Prob. 86PCh. 3 - Prob. 87PCh. 3 - Prob. 88PCh. 3 - Prob. 89IIPCh. 3 - Prob. 90IIPCh. 3 - Prob. 91IIPCh. 3 - Prob. 92IIPCh. 3 - Prob. 93IIPCh. 3 - Prob. 94IIPCh. 3 - Prob. 95IIPCh. 3 - Prob. 96IIPCh. 3 - Prob. 97IIPCh. 3 - Prob. 105DCCh. 3 - Kerry is employed as a ticket vendor at an...Ch. 3 - Prob. 107DCCh. 3 - Prob. 108DCCh. 3 - Prob. 109EDC
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