Professional Documents
Culture Documents
1 Nasty Bank
2019
1/1/2019 To record the loan receivable
Cash 342,100
Unearned interest income 342,100
Interest Interest
received Income (12%) - Amortization Carrying
Date (10%) - SR ER (Discount) amount
1/1/2019 3,807,900
12/31/2019 400,000 456,948 56,948 3,864,848
12/31/2020 400,000 463,782 63,782 3,928,630
12/31/2021 400,000 471,370 71,370 4,000,000
Cash 400,000
Interest income 400,000
Cash 400,000
Interest income 400,000
Cash 400,000
Interest income 400,000
Cash 4,000,000
Loan receivable 4,000,000
2 Awesome Company
Interest Interest
received Income (12%) - Amortization Carrying
b. Date (10%) - SR ER (Discount) amount
1/1/2019 3,711,500
12/31/2019 400,000 445,380 45,380 3,756,880
12/31/2020 400,000 450,826 50,826 3,807,706
12/31/2021 400,000 456,925 56,925 3,864,630
12/31/2022 400,000 463,756 63,756 3,928,386
12/31/2023 400,000 471,614 71,614 4,000,000
Cash 350,000
Unearned interest income 350,000
Cash 400,000
Interest income 400,000
Cash 400,000
Interest income 400,000
3 Pauper Bank
Principal 3,000,000
Direct origination cost 260,300
Origination fee received from the borrower (100,000)
Initial carrying amount of loan receivable 3,160,300
Interest Interest
received (8%) - Income (6%) - Amortization Carrying
Date SR ER (premium) amount
1/1/2019 3,160,300
12/31/2019 240,000 189,618 50,382 3,109,918
12/31/2020 240,000 186,595 53,405 3,056,513
12/31/2021 240,000 183,487 56,513 3,000,000
Cash 100,000
Direct origination cost 100,000
Cash 240,000
Interest income 240,000
Cash 240,000
Interest income 240,000
Cash 240,000
Interest income 240,000
Cash 3,000,000
Loan receivable 3,000,000
4
a. Principal 5,000,000
Direct origination cost 457,500
Origination fee received from borrower (200,000)
Initial carrying amount of loan receivable 5,257,500
Interest Interest
received Income (8%) - Amortization Carrying
b. Date (10%) - SR ER (premium) amount
1/1/2019 5,257,500
12/31/2019 500,000 420,600 79,400 5,178,100
12/31/2020 500,000 414,248 85,752 5,092,348
12/31/2021 500,000 407,652 92,348 5,000,000
c.
1/1/2019 To record the loan receivable
Cash 200,000
Direct origination cost 200,000
Cash 500,000
Interest income 500,000
Cash 500,000
Interest income 500,000
Cash 500,000
Interest income 500,000
Cash 5,000,000
Loan receivable 5,000,000
5 Solvent Bank
Expected
principal Total PV of
Date payments PVF of 1 cash flow
12/31/2020 1,000,000 0.93 930,000
12/31/2021 2,000,000 0.86 1,720,000
12/31/2022 3,000,000 0.79 2,370,000
5,020,000
or
12/31/2019
Principal 6,000,000
Less: Allowance for impairment loss (980,000)
Carrying amount of loan receivable 5,020,000
12/31/2020
12/31/2021
12/31/2022
Cash 1,000,000
Loan receivable 1,000,000
Cash 2,000,000
Loan receivable 2,000,000
Cash 3,000,000
Loan receivable 3,000,000
To record the amotization of allowance for impairment loss
6 Cozy Bank
Expected
principal Total PV of
(1) Date payments PVF of 1 cash flow
12/31/2020 500,000 0.89 445,000
12/31/2021 1,000,000 0.80 800,000
12/31/2022 2,000,000 0.71 1,420,000
12/31/2023 4,000,000 0.64 2,560,000
5,225,000
Interest Carrying
Date Collection income (12%) Principal amount / PV
12/31/2019 5,225,000
12/31/2020 500,000 627,000 (127,000) 5,352,000
12/31/2021 1,000,000 642,240 357,760 4,994,240
12/31/2022 2,000,000 599,309 1,400,691 3,593,549
12/31/2023 4,000,000 406,451 3,593,549 -
(3)
12/31/2019 To record the impairment loss
Cash 500,000
Loan receivable 500,000
Cash 1,000,000
Loan receivable 1,000,000