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What is the balance of the unearned interest income

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Question - With solution po thank you! BDO granted a loan to ACB Company on January 1, 2020. The interest rate on the loan is 10% payable annually starting December 31, 2020. The loan matures in five years on December 31, 2024.

Principal Amount 1,000,000

Direct origination cost 100,000

Origination fee received from borrower 27,500

The effective rate on the loan after considering the direct origination cost and the origination fee received is 12%.

What is the balance of the unearned interest income on December 31, 2021?

Reference no: EM133011522

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