Question
On December 31, 2020,ConcordCompany signed a $1,022,000note toMarigoldBank. The market interest rate at that time was11%. The stated interest rate on the note was9%, payable
On December 31, 2020,ConcordCompany signed a $1,022,000note toMarigoldBank. The market interest rate at that time was11%. The stated interest rate on the note was9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales,Concord's financial situation worsened. On December 31, 2022,MarigoldBank determined that it was probable that the company would pay back only $613,200of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,022,000loan.
Determine the amount of cashConcordreceived from the loan on December 31, 2020.
Find a note amortization schedule forMarigoldBank up to December 31, 2022
Determine the loss on impairment thatMarigoldBank should recognize on December 31, 2022.
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