Scribd Logo
Upload

Welcome to Scribd!

  • 69 views

    Problem 7-1 2019: Date Interest Received Interest Income Amortization Carrying Value

    Uploaded by

    Jane Carla Garbida
    This document contains journal entries and calculations related to accounting for loan receivables. It presents entries for the origination and amortization of interest on multiple loans from 2019 through 2021. Calculations show the carrying value and interest income recognized over time for each loan.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Problem 7-1 2019: Date Interest Received Interest Income Amortization Carrying Value

    Uploaded by

    Jane Carla Garbida
    69 views11 pages
    This document contains journal entries and calculations related to accounting for loan receivables. It presents entries for the origination and amortization of interest on multiple loans from 2019 through 2021. Calculations show the carrying value and interest income recognized over time for each loan.

    Original Description:

    Valix

    Original Title

    7 2019

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document contains journal entries and calculations related to accounting for loan receivables. It presents entries for the origination and amortization of interest on multiple loans from 2019 through 2021. Calculations show the carrying value and interest income recognized over time for each loan.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    69 views11 pages

    Problem 7-1 2019: Date Interest Received Interest Income Amortization Carrying Value

    Uploaded by

    Jane Carla Garbida
    This document contains journal entries and calculations related to accounting for loan receivables. It presents entries for the origination and amortization of interest on multiple loans from 2019 through 2021. Calculations show the carrying value and interest income recognized over time for each loan.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 11

    Problem 7-1

    2019
    Jan. 1 Loan receivable 4,000,000
    Cash 4,000,000
    Cash 342,100
    Unearned interest income 342,100
    Unearned interest income 150,000
    Cash 150,000
    Dec. 31 Cash 400,000
    Interest income 400,000
    Unearned interest income 56,948
    Interest income 56,948

    (10%) (12%)
    Date Interest received Interest income Amortization Carrying value

    01/01/2019 3,807,900
    12/31/2019 400,000 456,948 56,948 3,864,848
    12/31/2020 400,000 463,782 63,782 3,928,630
    12/31/2021 400,000 471,370 71,370 4,000,000

    *12% x 3,928,630 equals 471,435, or a difference of P65 due to rounding.


    2020
    Dec. 31 Cash 400,000
    Interest income 400,000
    2020
    Dec. 31 Unearned interest income 63,782
    Interest income 63,782
    2021
    Dec. 31 Cash 400,000
    Interest income 400,000
    Unearned interest income 71,370
    Interest income 71,370
    Cash 4,000,000
    Loan receivable 4,000,000
    Problem 7-3
    2019
    Jan. 1 Loan receivable 3,000,000
    Cash 3,000,000
    Direct origination cost 260,300
    Cash 260,300
    Cash 100,000
    Direct origination cost 100,000
    Dec. 31 Cash 240,000
    Interest income 240,000
    Interest income 50,382
    Direct origination cost 50,382
    (8%) (6%)
    Date Interest received Interest income Amortization Carrying value

    01/01/2019 3,160,300
    12/31/2019 240,000 189,618 50,382 3,109,918
    12/31/2020 240,000 186,595 53,405 3,056,513
    12/31/2021 240,000 183,487 56,513 3,000,000
    2020
    Dec. 31 Cash 240,000
    Interest income 240,000

    Interest income 53,405


    Direct origination cost 53,405

    2021
    Dec. 31 Cash 240,000
    Interest income 240,000

    2021
    Dec. 31 Interest income 56,513
    Direct origination cost 56,513

    Cash 3,000,000
    Loan receivable 3,000,000
    Problem 7-5

    Requirement 1
    December 31, 2020 (1,000,000 x .93) 900,000
    December 31, 2021 (2,000,000 x .86) 1,720,000
    December 31, 2022 (3,000,000 x .79) 2,370,000
    Total present value of loan 5,020,000

    Requirement 2
    Loan receivable – 12/31/2019 6,000,000
    Accrued interest (6,000,000 x 8%) 480,000
    Total carrying value 6,480,000
    Present value of loan 5,020,000
    Impairment loss 1,460,000

    Requirement 3
    2019
    Impairment loss 1,460,000
    Accrued interest receivable 480,000
    Allowance for loan impairment 980,000
    2020
    Cash 1,000,000
    Loan receivable 1,000,000
    Allowance for loan impairment 401,600
    Interest income (8% x 5,020,000) 401,600
    2021
    Cash 2,000,000
    Loan receivable 2,000,000
    Allowance for loan impairment 353,728
    Interest income 353,728
    Loan receivable – 12/31/2020 5,000,000
    Allowance for loan impairment (980,000 – 401,600) ( 578,400)
    Carrying value – 12/31/2020 4,421,600

    Interest income for 2010 (8% x 4,421,600) 353,728

    2022
    Cash 3,000,000
    Loan receivable 3,000,000

    Allowance for loan impairment 224,672


    Interest income 224,672

    Loan receivable – 12/31/2021 3,000,000


    Allowance for loan impairment (578,400 – 353,672) ( 224,672)
    Carrying value – 12/31/2021 2,775,328

    Interest income for 2022 (8% x 2,775,328) 222,026


    Allowance per book 224,672
    Difference due to rounding 2,646
    Problem 7-6
    Requirement 1

    December 31, 2020 ( 500,000 x .89) 445,000


    December 31, 2021 (1,000,000 x .80) 800,000
    December 31, 2022 (2,000,000 x .71) 1,420,000
    December 31, 2023 (4,000,000 x .64) 2,560,000
    Total present value of loan 5,225,000

    Requirement 2
    Loan receivable 7,500,000
    Accrued interest receivable (12% x 7,500,000) 900,000
    Total carrying value 8,400,000
    Present value of loan 5,225,000
    Impairment loss 3,175,000

    Requirement 3
    2019 Impairment loss 3,175,000
    Accrued interest receivable 900,000
    Allowance for loan impairment 2,275,000
    2020 Cash 500,000
    Loan receivable 500,000

    Allowance for loan impairment 627,000


    Interest income (12& x 5,225,000) 627,000

    2021 Cash 1,000,000


    Loan receivable 1,000,000

    Allowance for loan impairment 642,240


    Interest income 642,240

    Loan receivable – 12/31/2020 7,000,000


    Allowance for loan impairment (2,275,000 – 627,000) (1,648,000)
    Carrying value – 12/31/2020 5,352,000

    Interest income for 2021 (12% x 5,352,000) 642,240


    Problem 7-7

    Dec. 31, 2022 ( 360,000 x .772) 277,920 Face value of loan 4,000,000
    Dec. 31, 2023 ( 360,000 x .708) 254,880 Present value of loan 3,365,360
    Dec. 31, 2024 ( 360,000 x .650) 234,000 Impairment loss 634,640
    Dec. 31, 2025 (4,360,000 x .596) 2,598,560
    Total present value of loan 3,365,360

    2019 Cash 360,000


    Interest income 360,000
    Impairment loss 634,640
    Allowance for loan impairment 634,640
    2020 Allowance for loan impairment 302,882
    Interest income (9% x 3,365,360) 302,882
    2021 Allowance for loan impairment 331,758
    Interest income (634,640 – 302,882) 331,758
    2022 Cash 360,000
    Interest income 360,000
    2023 Cash 360,000
    Interest income 360,000
    2024 Cash 360,000
    Interest income 360,000

    2025 Cash 4,360,000


    Interest income 360,000
    Loan receivable 4,000,000

    You might also like