On December 31, 2019,LarkspurInc. borrowed $81,341from Par Bank, signing a $131,000,5-year, non-interest-bearing note. The note was issued to yield10% interest. Unfortunately, during 2020Larkspurbegan to experience financial difficulty. As a result, this was determined to be a significant increase in risk, and at December 31, 2020, Par Bank estimated that it was probable that it would receive only $98,250at maturity. For simplicity, assume that this reflects the probability-weighted amount. The market rate of interest on loans of this nature is now11%. Both companies prepare financial statements in accordance with IFRS 9.

Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the entry (if any) to record the impairment of the loan on December 31, 2020, by Par Bank. (Hint:Refer to Chapter 3 for tips on calculating.