Nasty Bank granted a loan to a borrower on January 1,2020. The interest on the loan is 10% payable annually starting December 31, 2020 The loan matures in three years on December 31, 2022 Principal amount 4,000,000 Direct origination cost incurred 150,000 Origination fee charged against the borrower 342,100 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. Required: Prepare journal entries for 2020, 2021 and 2022.

Q: On January 1, 2020, MP's customer issued a 3 year 8% note, PHP 3,000,000 for services billed to be…

A: Carrying amount is also known as carrying value or book value. The carrying amount of a note issued…

Q: Campus Flights takes out a bank loan in the amount of $200,500 on March 1, 2019. The terms of the…

A: Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: Mermaid Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 12%…

A: CARRYING VALUE It refers to the worth of an asset or a debt at the time it was purchased. Carrying…

Q: PDR Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable…

A:

Q: ABC Bank granted a loan to a borrower on Jan. 1, 2019. The interest on the loan is 10% payable…

A: Interest income is the sum of money given by an organization which has raise money in any sort of…

Q: M&M Bank granted a loan to a borrower on April 1, 2020. The interest on the loan is 10% payable…

A: The carrying value of the loan is calculated by discounting the future cash flows from the loan at…

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: The Pita Pit borrowed $197,000 on November 1, 2021, and signed a six-month note bearing interest at…

A: Formula: Interest expense = Principal amount x Interest rate x Time period

Q: 3,000,000 Direct origination cost incurred                                  260,300 Origination fee…

A: An amortizing loan is a regular type of installment loan where the regular monthly payment is done…

Q: Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears…

A: Formula: Interest expense = Notes amount x Interest rate x Time period

Q: How much shall be reported as interest income for 2022? ALVR Digital Bank granted a loan to a client…

A: Interest Income  Interest income refers to the amount of money that is paid by the borrower to the…

Q: What is the interest income for 2021? National Bank granted a loan to a borrower on January 1, 2021.…

A: First, calculate the carrying value of borrowed amount: Carrying amount=Principle amount+Direct…

Q: On January 1, 2021, Tropical Paradise borrows $36,000 by agreeing to a 5%, four-year note with the…

A: Journal entry to record issue of installment note and first two monthly payments are as under:

Q: On December 31, 2020, Sack Port Ventures Inc. borrowed $103,000 by signing a four-year, 8.0%…

A: The note payable is liability for the business. The amount on note payable due in one year is…

Q: Awesome Bank granted a loan to a borrower on January 1, 2019. The interest rate on the loan is 10%…

A: Given Information, Principal Amount = 4,000,000 Direct origination Cost =$150,000 Origination fees…

Q: akota Company received a $25,000, one year, 9 percent bank loan on October 31, 2018. Interest is…

A: Interest expense is to be treated as the expense of the current year if it is due during the year…

Q: Blossom Company receives $240,000 when it issues a $240,000, 10%, mortgage note payable to finance…

A: Amortization schedule of a mortgage note for two years: AnnualInterestPeriod CashPayment…

Q: Campus Flights takes out a bank loan in the amount of $200,500 on March 1, 2019. The terms of the…

A: “Since you have posted a question with multiple subparts, we will be solving the first three…

Q: Carla Vista Electronics issues a $353,500, 3%, 15-year mortgage note on December 31, 2019. The…

A: The installment payment schedule is one in which the yearly payment for the debt taken and the…

Q: ABC Bank granted a loan to a borrower on Jan. 1, 2019. The interest on the loan is 10% payable…

A: Principal amount 8,000,000 Add: Direct origination cost 123,000 Less: Origination fee received…

Q: Flipco signed a 10-year note payable on January 1, 2018, of $800,000. The note requires annual…

A: Calculate the interest expense:

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A: Interest Income for 2021 = Principal amount* interest rate where,  Principal amount = $3,000,000…

Q: Safari Bank granted a loan to a borrower on Jan. 1, 2020. The interest on the loan is 8% payable…

A: Initial measurement of loan receivables on Jan 1, 2020 should be made as follows:   Amount…

Q: RED Corporation

A: Current liabilities square measure a company's short-run money obligations that square measure due…

Q: On January 1, 2020, Vaughn Manufacturing borrows $ 3150000 from National Bank at 12% annual…

A: Computation of Cash inflow and outflow On borrowing 315000, Company has to pay interest of (315000 x…

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A: The initial carrying amount is the amount of loan at which the lender lends the money for a period…

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A: For calculating interest expense, we will need to make amortization schedule of loan over a period…

Q: On January 1, 2019 Leroy Inc. signed a 3 year loan for $80,000 with interest rate of 10%.  The loan…

A: Annual instalment = Amount borrowed / Present value annuity factor (10%, 3 years) = $80,000 /…

Q: Awesome Bank granted a loan to a borrower on January 1, 2020. The interest rate on the loan is 10%…

A: Carrying value: It is the net book value of the asset at the end of the year after deducting…

Q: Chris Garcia Bank granted a loan to a borrower on January 1,2021. The interest on the loan is 10%…

A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…

Q: M&M Bank granted a loan to a borrower on April 1, 2020. The interest on the loan is 10% payable…

A: A loan is a debt amount granted by banks or other financial institutions to borrowers. The duration…

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A: Comment - Multiple Questions Asked 1) Computation of Carrying Amount of Loan Carrying Amount of loan…

Q: Carla Vista Electronics issues a $353,500, 3%, 15-year mortgage note on December 31, 2019. The…

A: Installment schedule

Q: On December 1, 2021, your company borrowed $30,000, a portion of which is to be repaid each year on…

A: given   On December 1, 2021, your company borrowed $30,000, a portion of which is to be repaid each…

Q: Royal Bank granted a loan to a borrower on January 1, 2019. The interest rate on the loan is 8%…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: B. MATATAG Bank loaned P5,000,000 to a borrower on January 1, 2019. The term of the loan require…

A: The impairment loss can be defined as a decrease in the net carrying value of an asset that is…

Q: Moderate Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10%…

A: Carrying or book value is the worth of the asset or any debt when it is purchased.

Q: Flipco signed a 10-year note payable on January 1, 2018, of $800,000. The note requires annual…

A:

Q: Durango, Inc. borrowed $20,000 on October 1, 2020. Durango will not make any payments on this loan…

A: Total interest for 3 years = Amount owe at the end - amount borrowed = $26000 - 20000 = $6000…

Q: Awesome Bank granted a loan to a borrower, on January 1, 2021. The interest rate on the loan is 10%…

A: Loans Receivable It is important to keep the track on the loan receivable which is one of the…

Q: ABC Bank granted a loan to a borrower on Jan. 1, 2019. The interest on the loan is 10% payable…

A: Interest income refers to that income which is earned on the amount provided to the borrower. This…

Q: Campus Flights takes out a bank loan in the amount of $200,500 on March 1, 2019. The terms of the…

A: In this problem we have to first calculate 10 equal instalments.We have to calculate present value…

Q: Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021. The terms…

A: given, loan amount = $3000,000 which is not paid for first two years.

Q: On January 1, 2019, a company borrows $1,000 cash by signing a four-year, 5% installment note. The…

A: Given: Borrowed amount = $ 1,000 Rate of note = 5 % Amount for equal payment = $ 282

Q: On January 1, 2019, Eagle Company borrows $19,000 cash by signing a four-year, 8% installment note.…

A: The loan is a value that is borrowed from external sources like banks and this amount is repaid…

Q: Damoah's Pizza Co. borrowed $200,000 on January 1, 2020, and signed a two-year note bearing interest…

A: Formula: Interest amount = Principal amount x interest rate Multiplying interest rate with principal…

Q: On January 1, 2021, Tropical Paradise borrows $50,000 by agreeing to a 6%, six-year note with the…

A: A bank is a financial institution which accepts cash or deposits from customers and grants loans to…

Q: On December 1, 2021, your company borrowed $48,000, a portion of which is to be repaid each year on…

A: On December 31, 2021: $48,000 is payable; $6,400 in 2022 and the remaining later. So payable amount…

Q: Allen Inc. took out a 1-year, 8%, $100,000 loan on March 31, 2018. Interest is due upon maturity of…

A: Formula: Interest expense = Loan Amount x Interest rate x Time period

Q: How much shall be reported as interest income for 2022? ALVR Digital Bank granted a loan to a client…

A: Interest Income - It is the amount of money paid by the borrower over and above the loan amount to…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.