Reference no: EM132817679

Question - On December 31, 2017. CIT Bank has a loan receivable of P4,000,000 from a borrower that is carrying at face amount and is due on December 31, 2022. Interest on the loan is payable at 9% each December 31. The borrower paid the interest due on December 31, 2017 but informed the bank that it would probably miss the next two years' interest payments because of financial difficulty. After that the borrower is expected to resume the annual interest payment but it would make the principal payment one year late, with interest paid for that additional year at the time of principal payment. The market interest rate as of December 31, 2017 is 11%. Prepare the necessary entries from 2017 until 2023.