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How much is the balance of allowance for loan impairment

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PROBLEM - On January 1, 2020, Tigreal Bank granted a 10%, P3,000,000 loan to Kagura Company. The principal is payable on December 31, 2023, and interest payments are at the end of the year. On December 31, 2021, Kagura defaulted on the payment of interest, because of financial difficulty. The loan is assessed to be impaired. The annual interest can no longer be collected. Additionally, the principal is to be collected in three annual payments starting December 31, 2025.

Required -

1. How much is the impairment loss recognized in 2021?

2. How much interest income is recognized in 2022?

3. How much is the balance of allowance for loan impairment on December 31, 2022?

4. How much interest income is recognized in 2023?

Reference no: EM132984507

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