On December 31, 2014, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest-rate note. The note was issued to yield 10% interest. Unfortunately, during 2016, Firth began to experience financial difficulty. As a result, at December 31, 2016, Paris Bank determined that it was probable that it would collect only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%.

Instructions

(a)	Prepare the entry (if any) to record the impairment of the loan on December 31, 2016, by Paris Bank.

(b)	Prepare the entry on March 31, 2017, if Paris learns that Firth will be able to repay the loan under the original terms.

Professional Research

IFRS7-4.

As the new staff person in your company's treasury department, you have been asked to conduct research related to a proposed transfer of receivables. Your supervisor wants the authoritative sources for the following items that are discussed in the receivables transfer agreement.

Instructions

Access the IFRS authoritative literature at the IASB website (http://eIFRS.iasb.org/). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to prepare responses to the following items.

(a)	Identify relevant IFRSs that address transfers of receivables.

(b)	What are the objectives for reporting transfers of receivables?

(c)	Provide the definition for