1.

FALSE
2. FALSE
3. FALSE
4. FALSE
5. TRUE
6. TRUE
7. FALSE
8. TRUE

9. D
10. D

1. C
2. D

Impairment Loss 592,100

Allowance for loan impairment 592,100

3,000,000

500,000 (.9091) = 454,550

1,000,000 (.8264) = 826,400

1,500,000 (.7513) = 1,126,950 2,407,900

Impairment loss 592,100

Principal amount 1,500,000

Origination fees charged against the borrower (50,000)

Direct Origination cost incurred 130,150

Initial carrying amount of loan 1,580,150

AMORTIZATION TABLE

DATE INTEREST INTEREST INCOME AMORTIZATION CARRYING

AMOUNT
JAN. 1, 2020 1,580,175
DEC. 31, 2020 120,000 94,810.50 25,189.50 1,554,985.50
DEC. 31, 2021 120,000 93,299.13 26,700.87 1,528,284.63
DEC. 31, 2022 120,000 91,697.08 28,302.92 1,499,981.71
ROUNDED OFF
1,500,000

CARRYING AMOUNT OF LOAN RECEIVABLE

2020- 1,554,985.50
2021- 1,528,284.63
2022- 1,499,981.71

ENTRY
2020 CASH 94,810.50

INTEREST INCOME 94,810.50

2021 CASH 93,299.13

INTEREST INCOME 93,299.13

2022 CASH 91,697.08

INTEREST INCOME 91,697.08

PV FACTOR
2021 500,000 0.89 445,000
2022 1,000,000 0.80 800,000
2023 2,000,000 0.71 1,420,000
2024 4,000,000 0.64 2,560,000
 5,225,000

FACE VALUE 7,500,000

ACCRUED INTEREST RATE 1,800,000
CARRYING AMOUNT 9,300,000

LOSS ON IMPAIRMENT 4,075,000

INTEREST RECEIVED CARRYING AMOUNT

JAN. 1, 2018 7,500,000
DEC. 31, 2018 900,000 8,400,000
DEC. 31, 2019 900,000 9,300,000
DEC. 31, 2020 4,075,000 5,255,000
DEC. 31, 2021 627,000 5,852,000
DEC. 31, 2022 702,240 6,544,240
DEC. 31, 2023 786,508.80 7,340,748.80

2018 CASH 900,000

INTEREST RECEIVABLE 900,000
2019 CASH 900,000
INTEREST RECEIVABLE 900,000
2020 IMPAIRMENT LOSS 4,075,000
ALLOWANCE FOR IMPAIRMENT LOSS 4,075,000

2021 INTEREST RECEIVABLE 627,000

ACRUED INTEREST INCOME 627,000
2022 INTEREST RECEIVABLE 702,240
 ACRUED INTEREST INCOME 702,240

2023 INTEREST RECEIVABLE 786,508.80

ACRUED INTEREST INCOME 786,508.80