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What is the Carrying value of the loan as of March

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Question - M&M Bank granted a loan to a borrower on April 1, 2020. The interest on the loan is 10% payable annually starting March 31 2021. The loan matures in three years on March 31, 2023. Data related to the loan are: Principal amount - 4,000,000; Origination fees charged against the borrower - 342,100; Direct origination cost incurred - 150,000. After considering the origination fees charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%.

Required -

a. What is the Carrying value of the loan as of April 1, 2020?

b. What is the Interest received ending December 31, 2020?

c. What is the Interest income ending December 31, 2020?

d. What is the carrying value of the loan as of March 31, 2021?

Reference no: EM132833862

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