How much is the loss on impairment of loan

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Problem - On July 1, 20202, XYZ Company borrowed P2,500,000 from BPI, with 12% interest and term of 8 years. Interest is payable every June 30. On January 1, 2022, it is determined that XYZ is under financial distress and that collection of interests is no longer likely, and that only P2,300,000 is collectible on December 31, 2028. It is the company's policy to use and allowance account for impairment of loans.

Required -

1. How much is the loss on impairment of loan?

2. How much interest income is recognized in 2022?

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

Reference no: EM132986320

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