Illustration 20 : ABC Bank gave loans to a customer Target Ltd. that carry fixed interest rate @ 10% per annum for a 5- year term and 12% per annum for a 3-year term. Additionally, the bank charges processing fees @1% of the principal amount borrowed. Target Ltd borrowed loans as follows: - 10 lacs for a term of 5 years - 8 lacs for a term of 3 years. Compute the fair value upon initial recognition of the loan in books of Target Ltd. and how will loan processing fee be accounted?