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What is the interest income to be recognized

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Question: On January 1, 2017, the lending company made a P200,000, 8% loan. The interest is receivable at the end of each year, with the principal amount to be received at the end of 5 years. As of December 31, 2017, the interest for the current year has not yet been received nor recorded because the borrower is experiencing financial difficulties. The lending company negotiated a restructuring of the loan. The payment of all of the interest- based on the original principal will be delayed until the end of the 5-year loan term. In addition, the amount of principal repayment will be dropped from P200,000 to P100,000. The prevailing interest rate for similar type of loan as of December 31, 2017 is 10%. The interest income to be recognized in 2018 is?

Reference no: EM132757646

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