Jan 1,2012

Loan Recievable

4,000,000
Cash

4,000,000

Cash

342,100
Unearned income

342,100

Unearned interest income

Cash
Pv of principal interest
( 4,000,000 x 0.7118 )
Pv of interest
( 400,000 x 2.4018 )

Date

150,000
2,847,200
960,720
3,807,920

Interest Received

1/1/2012
12/31/2012
12/31/2013
12/31/2014

150,000

Interest Income

400,000
400,000
400,000

456,950
463,784
471,345

Amortization

Carrying amount
3,807,920
3,864,870
3,928,655
4,000,000

56,950
63,784
71,345

Dec 31,2012
Cash

400,000
Interest Income

Unearned interest income

Interest income

400,000
56,950
56,950

Dec 31,2013
Cash

400,000
Interest income

Unearned interest income

Interest income

400,000
63,784
63,784

Dec 31,2014
Cash

400,000
Interest income

Unearned interest income

Interest income
Cash

400,000
71,345
71,345
4,000,000

Loan Receivable

4,000,000