What is the loan impairment loss on December 31, 2021? Kalino Bank loaned P5,000,000 to Caticlan Company on January 1, 2019. The terms 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. Caticlan Company made the required payments during 2020 and 2021. However, during 2021 Caticlan Company began to experience financial difficulties, requiring Kalibo Bank to reassess the collectability of the loan. On December 31, 2021, Kalibo Bank determined that the remaining principal payment will be collected but the collection of the interest is unlikely. Kalibo Bank did not accrue the interest on December 31, 2021. The present value of 1 at 8% is as follows: For one period For two periods For three periods 0.926 0.857 0.794 O a. 423,000 O b. 217,000 O c. 222,000 O d. 0
What is the loan impairment loss on December 31, 2021? Kalino Bank loaned P5,000,000 to Caticlan Company on January 1, 2019. The terms 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. Caticlan Company made the required payments during 2020 and 2021. However, during 2021 Caticlan Company began to experience financial difficulties, requiring Kalibo Bank to reassess the collectability of the loan. On December 31, 2021, Kalibo Bank determined that the remaining principal payment will be collected but the collection of the interest is unlikely. Kalibo Bank did not accrue the interest on December 31, 2021. The present value of 1 at 8% is as follows: For one period For two periods For three periods 0.926 0.857 0.794 O a. 423,000 O b. 217,000 O c. 222,000 O d. 0
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7C
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