### How loan loss reserve was established for loan recorded

Assignment Help Finance Basics
##### Reference no: EM131128255

After making payments for three years, one of the mortgage borrowers defaults on the mortgage. NewBank immediately takes possession of the house and sells it at auction for \$175,000. Legal fees amount to \$25,000. If no loan loss reserve was established for the mortgage loans, how is this event recorded?

#### Recalculate final balance sheet including its tax liability

f NewBank were required to establish a loan loss reserve at 0.25% of the loan value for commercial loans, how would this be recorded? Recalculate NewBank’s ROE and final balan

#### How much cash was received how are these transactions record

The end of the month finally arrives for NewBank, and it receives all the required payments from its mortgages, commercial loans, and T-bills. How much cash was received? How

#### What does the balance sheet look like after this transaction

To meet any shortfall in the previous question, NewBank will borrow the cash in the federal funds market. Management decides to borrow the needed funds for the remainder of th

#### What do the bank balance sheets look like

NewBank started its first day of operations with \$6 million in capital. \$100 million in checkable deposits is received. The bank issues a \$25 million commercial loan and anoth

#### What does the balance sheet look like

NewBank decides to invest \$45 million in 30-day T-bills. The T-bills are currently trading at \$4,986.70 (including commissions) for a \$5,000 face value instrument. How many do

#### How much of a loss is incurred

Wiggley S&L issues a standard 30-year fixed rate mortgage at 7.8% for \$150,000. Thirty-six months later, mortgage rates jump to 13%. If the S&L sells the mortgage, how much of

#### Would you be willing to buy stock in that bank

If the president of a bank told you that the bank was so well run that it has never had to call in loans, sell securities, or borrow as a result of a deposit outflow, would yo

#### What will happen to the exchange rate

If the dollar begins trading at \$1.30 per euro, with the same interest rates given in Problem 3, and the ECB raises interest rates so that the rate on euro deposits rises by 1