On December 31, 2020, Culver Company signed a $1,196,300 note to Larkspur Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Culvers financial situation worsened. On December 31, 2022, Larkspur Bank determined that it was probable that the company would pay back only $717,780 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,196,300 loan.

(a)

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Your answer is correct.

Determine the amount of cash Culver received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)

Amount of cash Culver received from the loan

$enter a dollar amount of cash Culver received from the loan

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(b)

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Your answer is correct.

Prepare a note amortization schedule for Larkspur Bank up to December 31, 2022. (Round answers to 0 decimal places, e.g. 5,275.)

Note Amortization Schedule (Before Impairment)
Date		Cash Received		Interest Revenue		Increase in Carrying Amount		Carrying Amount of Note
12/31/20								$enter a dollar amount
12/31/21		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		enter a dollar amount
12/31/22		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount

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Attempts: 1 of 3 used

(c)

Determine the loss on impairment that Larkspur Bank should recognize on December 31, 2022. (Round present value factors to 5 decimal places, e.g. 0.52500 and final answer to 0 decimal places, e.g. 5,275.)

Loss due to impairment

$enter the Loss due to impairment in dollars