Reference no: EM13847111
On january 1 2014, June company loaned july company amounting to 2,000,000 and received a two year, 6% , 2,000,000 note. The note calls for annual interest tp be paid each december 31. June collected the 2014 interest on schedule.
Howere, on dec 31 2015, based on the July company's recent financial difficulties, June expected that the 2015 interest which was recorded in the books, will not be collected and that only 1,200,000 of the principal will be recovered. The 1,200,000 principal amoung is expected to be collected in 2 equal installments on dec 31 2017 and december 31 2019.
The prevailing interest rate dir similar type of not as of december 31 2015 is 8% Based on the above informatuin answer the following ( round off present value factors to 4 decimal places)
1.) The present value of the expected future cash flows as of december 31, 2015
2.) The loan impairment loss in 2015
3.) How much is the interest income for the year 2016?
4.) Carrying amoubt of loan as of december 31 2017 Can you please show the solutions since i really dont understand this problem.