Reference no: EM131165502
-Determine the amount of impairment loss to be recognized by the bank for each of the alternatives and give entry to record impairment (Round off to four decimal places) 3-15.
Maynilad Bank has a P.10,000,000 loan to ABC Realty, which was invested by the latter in real estate development. Due to the economic downtrend in the real estate business, ABC Realty is experiencing declining sales and is likely to default on its obligation to Maynilad. ABC requests for a restructuring of its loan with Maynilad. Prevailing market rate of interest for similar obligations at the time of restructuring is 8%. Accrued interest receivable on the loan at December 31, 2016 is P1,000,000, based on stated interest rate of 10%. Maynilad had not previously recognized any impairment on this ABC note based on 12-month expected credit loss on date of initial recognition.
For each of the following alternative restructuring arrangements, determine the amount of the impairment loss to be recognized by Maynilad Bank, and give the entry in the books of the company to record the impairment. (Round off present value factors to four decimal places)
Alternative 1
•Reduction of principal to P9,000,000
•Condonation of accrued interest
•Extension of maturity date to December 31, 2018 Reduction of interest rate to 8%, payable annually on December 31.
Alternative 2
•Condonation of accrued interest
•Principal amount of P2,000,000 plus interest on the unpaid principal reduced to 8%, payable in annual installments to begin December 31, 2017.
Alternative 3
•Payment of the accrued interest on the date of restructuring (December 31, 2016)
•Extension of maturity date of the loan to December 31, 2018, with interest during the extended term at 7% payable on December 31, 2017 and 2018.
Alternative 4
•Extension of maturity date to December 31, 2018.
•Interest at 10% on the carrying value of the loan (P11,000,000) payable December 31, 2017 and December 31, 2018.
The present condition of ABC Realty indicates that it has the ability to meet the modified terms as indicated.
|
Economies have disappeard since onset of globalisation
: Many rich developed countries (like countries of the EU or the US have suffered from inexpensive imports coming from Asia and other emerging countries. As a result, many industries and parts of sectors of our economies have disappeard since the onset..
|
|
Two scenarios-mountains and oceans
: Which of these scenarios do you think is most likely to occur? Defend your choice by analyzing it in the context of the deep historical forces outlined in the textbook.
|
|
What are some of barriers faced by particular population
: There are countless people in need of our services in America today, including the disabled, those with mental health challenges, those living in poverty, the homeless, and victims of violence and domestic abuse, just to name a few. See the list on p..
|
|
What should the experimenters do with their data
: What should they do instead if they are unwilling to use a parametric test? (Note: The distance was greater with a lower ceiling, which suggests that interpersonal space is not dependent on just horizontal distance.)
|
|
Determine the amount of the impairment loss
: determine the amount of the impairment loss to be recognized by Maynilad Bank, and give the entry in the books of the company to record the impairment.
|
|
Blame for creating a toxic organizational culture
: In the article "Who's to Blame for Creating a Toxic Organizational Culture" Guthrie presents the position that as the leader, New Jersey Governor Chris Christie was responsible for harboring an environment that led to what was termed Bridgegate.
|
|
What should the perfectly competitive firm do
: If the market price for the firm's product is $30, What is its profit if it operates?If the market price for the firm's product is $14, what should the perfectly competitive firm do? What is the firm's supply curve given the data above
|
|
Economies have disappeard since onset of globalisation
: Many rich developed countries (like countries of the EU or the US have suffered from inexpensive imports coming from Asia and other emerging countries. As a result, many industries and parts of sectors of our economies have disappeard since the onset..
|
|
When both players maximize their monetary payoff
: In a trust game, player 1 is given $10. She can send any fraction of that money to player 2. Player 1 keeps the remainder. Whatever money is sent to player 2 is tripled in the process. When both players maximize their monetary payoff, what is the sub..
|