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What is the initial carrying amount of the loan receivable

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Reference no: EM133166016

Question - On January 1, 2021, Security Bank extended a 10%, P1,000,000 loan to XYZ Co. Principal is due on January 1, 2024 and interest are due annually every January 1. Security Bank incurred direct loan origination costs of P8,000. In addition, Security Bank charged XYZ Co. a 6-point non-refundable loan origination fee.

Required -

1. What is the initial carrying amount of the loan receivable?

2. What is the effective interest rate of the loan?

3. How much is the present value of the loan on January 1, 2022?

Reference no: EM133166016

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