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Compute the initial carrying amount of the loan

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Question - On January 1, 20x1, an entity obtains an 11%, P5,000,000 bank loan. The bank charges the entity an 8.74% nonrefundable loan origination fee. The principal on the loan matures on December 31, 20x4 but interest is due annually every December 31.

a. Compute the initial carrying amount of the loan.

b. Compute the effective interest rate on the loan.

c. Compute the carrying amount of the loan on December 31, 20x1.

Reference no: EM133137191

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