Assignment – Loan Receivable

China Bank granted a P1,000,000, 14% loan to ABC Co. on January 01, 2020. Interest payment is made every
December 31, and the principal will be paid on December 31, 2023. China Bank charged ABC Co. P10,000 for processing
of the loan. The actual cost incurred in processing the loan is P70,747.
Note: Use the whole PV Factor. Round off all computations to the nearest peso.
Required:
A. Give the carrying amount of the loan receivable on:
1. January 01, 2020
2. December 31, 2020
3. December 31, 2021
4. December 31, 2022
5. December 31, 2023
B. Give the journal entry to record:
2020
6. January 01 Granting of the loan
7. January 01 Receipt of origination fee
8. January 01 Payment of direct origination cost
9. December 31 Collection of interest
10. December 31 Amortization of direct origination cost
2021
11. December 31 Collection of interest
12. December 31 Amortization of direct origination cost
2022
13. December 31 Collection of interest
14. December 31 Amortization of direct origination cost
2023
15. December 31 Collection of interest
16. December 31 Amortization of direct origination cost
17. December 31 Collection of Principal
C. Prepare a partial balance sheet on December 31, 2021
Non-current Asset:
Loan Receivable [18]
Add: Direct Origination Cost [19]

CHART OF ACCOUNTS:
A Cash
B Loan Receivable
C Direct Origination Cost
D Unearned Interest Income
E Interest Income