Assignment 4.

2 Loans Receivable
PV of principal (1,000,000 x 0.79 793,832.00
PV of interest (60,000 x 2.5771) 154,626.00
Total PV of future cash flows 948,458.00

Total PV of cash flows 948,458.00

Origination fees 80,000.00
Principal (1,000,000.00)
Origination fees,1/1/2014 28,458.00

Date Interest Received Interest Income Amortization

January 1, 2014
December 31, 2014 60,000 75,877 15,877
December 31, 2015 60,000 77,147 17,147
December 31, 2016 60,000 78,519 18,519

Carrying Value 981,481.41

Accrued interest 60,000.00
Carrying Value 1,041,481.41
*Carrying Value, 12/31/2015 515,927.45
Impairment Loss 525,553.96

PV (300,000 x 0.9259) 277,777.78

PV (300,000 x 0.7938) 238,149.67
*Carrying Value, 12/31/2015 515,927.45
Carrying Amount
948,458
964,335
981,481
1,000,000