On January 1, 2022, De Vera Company loaned Dagpin Company amounting to P2,000,000 and received a two-year, 6%, P2,000,000 note. The note calls for annual interest to be paid each December 31. De Vera collected the 2022 interest on schedule. However, on December 31, 2023, based on the Dagpin’s recent financial difficulties, De Vera expects that the 2023 interest, which was recorded in the books, will not be collected and that only P1,200,000 of the principal will be recovered. The P1,200,000 principal amount is expected to be collected in two equal installments on December 31, 2025 and December 31, 2027. The prevailing interest rate for similar type of note as of December 31, 2023 is 8%. 36. What is the loan impairment loss to be recognized for the year 2023? 37. How much is the interest income for the year 2025? 38. The carrying amount of the loan as of December 31, 2026 is:
On January 1, 2022, De Vera Company loaned Dagpin Company amounting to P2,000,000 and received a two-year, 6%, P2,000,000 note. The note calls for annual interest to be paid each December 31. De Vera collected the 2022 interest on schedule. However, on December 31, 2023, based on the Dagpin’s recent financial difficulties, De Vera expects that the 2023 interest, which was recorded in the books, will not be collected and that only P1,200,000 of the principal will be recovered. The P1,200,000 principal amount is expected to be collected in two equal installments on December 31, 2025 and December 31, 2027. The prevailing interest rate for similar type of note as of December 31, 2023 is 8%. 36. What is the loan impairment loss to be recognized for the year 2023? 37. How much is the interest income for the year 2025? 38. The carrying amount of the loan as of December 31, 2026 is:
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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On January 1, 2022, De Vera Company loaned Dagpin Company amounting to P2,000,000 and received a two-year, 6%, P2,000,000 note. The note calls for annual interest to be paid each December 31. De Vera collected the 2022 interest on schedule. However, on December 31, 2023, based on the Dagpin’s recent financial difficulties, De Vera expects that the 2023 interest, which was recorded in the books, will not be collected and that only P1,200,000 of the principal will be recovered. The P1,200,000 principal amount is expected to be collected in two equal installments on December 31, 2025 and December 31, 2027. The prevailing interest rate for similar type of note as of December 31, 2023 is 8%.
36. What is the loan impairment loss to be recognized for the year 2023?
37. How much is the interest income for the year 2025?
38. The carrying amount of the loan as of December 31, 2026 is:
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