On 1/1/2020, JF bank advanced a loan to James Company by the amount of $100,000 with 8% yearly interest rate. The loan to be repaid over 5 years in 2 yearly instalments (on 30/6 and 31/12 of every year) starting from 30/6/2020. The loan agreement stipulates that James Company will pay 10 equal payment of $12,329 each.

On 31/12/2023, it was evident to JF Bank that James Company has financial difficulties and will collect only $5,000 in each of the last 2 payments.(the P.V. factor for 2 payments, 4% is 1.8861) Instructions:

1- Prepare the amortization schedule using effective interest method

2- Prepare the necessary journal entries for the loan receivable in JF Bank for the first

3- Prepare the necessary journal entries for the loan payable in James Company for the first 2 years

4- Prepare the journal entry to recognise the impairment due to credit risk in JF Banks records on 31/12/2023