Princess Honeylet P. Sigesmundo Oct.

10, 2021
BSA-2 FAR 5

Loan receivable 2,000,000

Interest receivable 200,000
Carrying amount of receivable before impairment 2,200,000

Estimated future cash flow 1,000,000

PV of ordinary annuity of 10%, n=2 1.73554
Present value of estimated future cash flow 1,735,540

Present value of estimated future cash flow 1,735,540

Carrying amount of receivable before impairment 2,200,000
Impairment loss 464,460

Requirement A.
Direct Method
Dec. 31, Impairment Loss 464,460
20x3 Accrued Interest Receivable 200,000
Loans Receivable 264,460

Allowance Method
Dec. 31, Impairment Loss 464,460
20x3 Accrued Interest Receivable 200,000
Loans Receivable 264,460

Requirement B.
Amortization Table
Date Collection Interest Income Amortization Present Value
Dec. 31, 20x3 1,735,540
Dec. 31, 20x4 1,000,000 173,554 826,446 909,094
Dec. 31, 20x5 1,000,000 90,909 909,091 0