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Problem 9-19 (IFRS) On January 1, 2021, Everlast Company had an overdue 1oo note payable at P6,000,000 and accrued interest payable of P600,000. As a

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Problem 9-19 (IFRS) On January 1, 2021, Everlast Company had an overdue 1oo note payable at P6,000,000 and accrued interest payable of P600,000. As a result of a restructuring agreement on January 1, 2021, the creditor agreed to the following concessions. a. Accrued interest of P600,000 is forgiven. b. The new principal is P4,000,000. . The new interest rate is 6% payable every December 31, d. The new maturiy date of the note is December 31, 2023. e. The entity paid P350,000 as an arrangement fee to the creditor. The PV of 1 at 10% for 3 periods is 0.75 and the PV of an ordinary annuity of 1 at 10% for 3 periods is 2.49. The market rate of interest for similar note is 14%. The PV of 1 at 14% for 3 periods is 0.67 and the PV of an ordinary annuity of 1 at 14% for 3 periods is 2.32. 1. At what amount should the new note payable be initially measured? a. 3,597,600 b. 3,947,600 c. 3,236,800 d. 4,000,000 2. What amount of gain on extinguishment should be recognized for 2021? a. 3,363,200 b. 3,013,200 C. 2,652,400 d. 3,002,400 the 2021? 3. What amount should be reported as interest expense for a. 453,152 b. 394,760 c. 359,760 d. 240,000 4. What is the carrying amount of the new note payable on December 31, 2021? a. 3,449,952 b. 4,000,000 c. 3,786,848 d. 3,689,952 316

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