Question
AINT NO MOUNTAIN HIGH ENOUGH has a note receivable from CLIMB EVERY MOUNTAIN (CEM). CEM is experiencing a great financial crisis and has negotiated for
AINT NO MOUNTAIN HIGH ENOUGH has a note receivable from CLIMB EVERY MOUNTAIN (CEM). CEM is experiencing a great financial crisis and has negotiated for a restructuring of its note with face amount of 800,000, and accrued interest of 88,000, based on interest rate of 11%. The note is due today. CEM asked that the principal and accrued interest be paid one-time after two years. Only 2% interest will be collected yearly moving forward. An allowance for bad debts of 20,000 relates to this note.
How much is the impairment loss?
please show your solution and explanation. PLEASE 116,865 IS INCORRECT. come up with the correct answer, thank you very much.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started