Problem 7-9 (IFRS) Moderate Bank granted a loan to a borrower on January l, 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 Direct origination cost incurred Indirect origination cost incurred Origination fee received from the borrower 5,000,000 100,000 50,000 340,000 After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. 1. What is the carrying amount of the loan receivable on January 1, 2020? а. 4,760,000 b. 5,000,000 c. 4,810,000 d. 4,660,000 2. What is the interest income for 2020? a. 571,200 b. 500,000 с. 476,000 d. 547,200 3. What is the carrying amount of the loan receivable on December 31, 2020? a. 5,000,000 b. 4,760,000 c. 4,831,200 d. 4,910,944 215

Problem 7-9 (IFRS) Moderate Bank granted a loan to a borrower on January l, 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 Direct origination cost incurred Indirect origination cost incurred Origination fee received from the borrower 5,000,000 100,000 50,000 340,000 After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. 1. What is the carrying amount of the loan receivable on January 1, 2020? а. 4,760,000 b. 5,000,000 c. 4,810,000 d. 4,660,000 2. What is the interest income for 2020? a. 571,200 b. 500,000 с. 476,000 d. 547,200 3. What is the carrying amount of the loan receivable on December 31, 2020? a. 5,000,000 b. 4,760,000 c. 4,831,200 d. 4,910,944 215

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 94PSA

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