How much should be reported as total current portions

Assignment Help Accounting Basics

Reference no: EM132837075

ABC Co has the following loan transactions as of December 31, 2020:

1. Loan of P60M from Metrobank. The loan was obtained on September 30, 2016 and is payable in 5 years. Payment of the loan is on equal monthly amortization. ABC Co does not have the option to refinance the loan. However, the company has successfully made an arrangement with Metrobank on February 15, 2021 to extend the loan for another 2 years which the bank approved.

2. Loan of P10M from BDO. The loan payment is P2M annually. As of December 31, 2020, it has a balance of P2M. ABC Company has an option to renew this loan for another 3 years, but ABC Co is committed to settle the loan next year when it becomes due

3. Loan of P6,630,758 from BPI. The loan was obtained on July 1, 2018 and is payable in 5 years. The payment schemes of the loan are as follows:

a) First year = P100,000 monthly payment

b) Second year = 5% increase monthly payment from first year

c) Third year = 5% increase in monthly payment from the second year

d) Fourth year = 5% increase in monthly payment from the third year

e) Fifth year = 5% increase in monthly payment from the fourth year

ABC Company does not have the option to extend the loan as it matures.

Required:

Problem 1: What is the total balance of loan liability of ABC Company as of December 31, 2020 ?

Problem 2: How much should be reported as TOTAL current and non current portions of the loan?

Reference no: EM132837075

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