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What is the loan impairment loss for kit-kat bank

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Reference no: EM132836905

Problem 1: On December 31, 2019, KIT-KAT Bank has a 5-year loan receivable with a face value of ?6,000,000 dated January 1, 2017 due on December 31, 2022. Interest is payable annually every December 31 at 9%. The borrower made the required interest payments until December 31,2018 but informed the bank that interest is accrued for 2019 will be paid together with the principal at maturity. There is a high probability that remaining interest payments will not be paid. The prevailing interest rate is 10%. What is the loan impairment loss for 2019? (Round off PV factors to 2 decimals)

a. ? 1,635,000
b. ? 1,111,800
c. ? 1,504,200
d. ? 1,046,400

Reference no: EM132836905

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