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What is the loan impairment loss for brown bank

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Reference no: EM132859043

Question 1: On December 31, 2020, BROWN Bank has a 5-year loan receivable with a face value of ?6,000,000 dated January 1, 2019 due on December 31, 2023. Interest is payable annually every December 31 at 9%. The borrower made the required interest payment on December 31, 2019 but informed the bank that interest accrued for 2020 will be paid together with the principal at maturity. There is a high probability that remaining interest payments will not be paid. The prevailing market rate is 10%. What is the loan impairment loss for 2020? (Round PV factors to 2 decimals) 

Option 1: ? 1,046,400

Option 2: ? 1,111,800

Option 3: ? 1,635,000

Option 4: ?1,504,200

Reference no: EM132859043

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