q 21

Johnstone Company has a loan receivable with a carrying value of $125,000 at December 31, 2019. On January 1, 2020, the borrower, Ralph Young Industries, declares bankruptcy, and Johnstone estimates that it will collect only 45% of the loan balance Assume that on January 4, 2021, Johnstone learns that Ralph Young Industries has emerged from bankruptcy. As a result, Johnstone now estimates that all but $11,500 will be paid on the loan. Under IFRS, which of the following entries would be made on January 4, 2021? a. Loan Receivable 57 250 Recovery of Impairment Loss 57,250 ob Loan Receivable 11,500 Recovery of Impairment Loss 11,500 Bad Debt Expense Impairment Loss 11,500 No journal entry is allowed under IFRS