Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

China Bank granted a P1,000,000, 14% loan to ABC Co. on January 01, 2020. Interest payment is made every December 31, and the principal will

image text in transcribed

China Bank granted a P1,000,000, 14% loan to ABC Co. on January 01, 2020. Interest payment is made every December 31, and the principal will be paid on December 31, 2023. China Bank charged ABC Co. P10,000 for processing of the loan. The actual cost incurred in processing the loan is P70,747. Note: Use the whole PV Factor. Round off all computations to the nearest peso. Required: A. Give the carrying amount of the loan receivable on: 1. January 01, 2020 2. December 31, 2020 3. December 31, 2021 4. December 31, 2022 5. December 31, 2023 B. Give the journal entry to record: 2020 6. January 01 Granting of the loan 7. January 01 Receipt of origination fee 8. January 01 Payment of direct origination cost 9. December 31 Collection of interest 10. December 31 Amortization of direct origination cost 2021 11. December 31 Collection of interest 12. December 31 Amortization of direct origination cost 2022 13. December 31 Collection of interest 14. December 31 Amortization of direct origination cost 2023 15. December 31 Collection of interest 16. December 31 Amortization of direct origination cost 17. December 31 Collection of Principal C. Prepare a partial balance sheet on December 31, 2021 Non-current Asset: Loan Receivable (18) Add: Direct Origination Cost (19) CHART OF ACCOUNTS: A Cash B Loan Receivable C Direct Origination Cost D Unearned Interest Income E Interest Income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems Connecting Careers Systems And Analytics

Authors: Arline A. Savage, Danielle Brannock, Alicja Foksinska

1st Edition

1119744474, 9781119744474

More Books

Students also viewed these Accounting questions

Question

What is the opportunity cost of a decision option?

Answered: 1 week ago