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What the carrying amount of the loan as of december is

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LLB Bank granted a loan to a borrower in the amount of P5,000,000 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. LLB Bank incurs P39,400 of direct loan origination cost and P10,000 of indirect loan origination cost. In addition, LLB bank charges the borrower an 8% non-refundable loan origination fee.

Required: Based on the above information, answer the following: (Round off the present value to four decimal places)

Question I. The carrying amount of the loan as of January 1, 2020 is

Question II. The effective interest rate of the loan is

Question III. The interest income to be recognized in 2020 is

Question IV. The carrying amount of the loan as of December 31, 2020 is

Reference no: EM132791661

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