On January 1, 20x1, ABC Bank extended a P1,000,000 loan to XYZ. Principal is due on December 31, 20x5 but 10% interest is due annually starting December 31, 20x1. On December 31, 20x3, XYZ was delinquent and it was ascertained that the loan is credit-impaired. ABC assessed that interests accruing on the loan will not be collected however the principal is expected to be collected in two equal annual installments starting December 31, 20x4. The current rate on December 31, 20x3 is 14%. Impairment loss is (use 6-decimal present value factor) The correct answer is: 232,231
On January 1, 20x1, ABC Bank extended a P1,000,000 loan to XYZ. Principal is due on December 31, 20x5 but 10% interest is due annually starting December 31, 20x1. On December 31, 20x3, XYZ was delinquent and it was ascertained that the loan is credit-impaired. ABC assessed that interests accruing on the loan will not be collected however the principal is expected to be collected in two equal annual installments starting December 31, 20x4. The current rate on December 31, 20x3 is 14%. Impairment loss is (use 6-decimal present value factor) The correct answer is: 232,231
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 4MC: A ski company takes out a $400,000 loan from a bank. The bank requires eight equal repayments of the...
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29. On January 1, 20x1, ABC Bank extended a P1,000,000 loan to XYZ. Principal is due on December 31, 20x5 but 10% interest is due annually starting December 31, 20x1. On December 31, 20x3, XYZ was delinquent and it was ascertained that the loan is credit-impaired. ABC assessed that interests accruing on the loan will not be collected however the principal is expected to be collected in two equal annual installments starting December 31, 20x4. The current rate on December 31, 20x3 is 14%. Impairment loss is (use 6-decimal present value factor)
The correct answer is: 232,231
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