2019

Jan. 1 Loan receivable 4,000,000

Cash 4,000,000

Cash 342,100
Unearned interest income 342,100

Unearned interest income 150,000

Cash 150,000

Dec. 31 Cash 400,000

Interest income 400,000

Unearned interest income 56,498

Interest income 56,498
10 12
Date Interest Received Interest income Amortization Carrying amount
01/01/2019 3,807,900
12/31/2019 400,000 456,948 56,948 3,864,848
12/31/2020 400,000 463,782 63,782 3,928,630
12/31/2021 400,000 471,370 71,370 4,000,000

2020
Dec. 31 Cash 400,000
Interest income 400,000

Unearned interest income 63,782

Interest income 63,782

2021
Dec. 31 Cash 400,000
Interest income 400,000

Unearned interest income 71,370

Interest income 71,370

Cash 4,000,000
Loan receivable 4,000,000
Requirement 1
Origination fee received 350,000
Direct origination cost (61,500)
Unearned interest income 288,500

Note receivable 4,000,000

Unearned interest income (288,500)
Carrying amouny - 1/1/2019 3,711,500

10% 12%
Date Interest received Interest income Amortization Carrying Amount
01/01,2019 3,711,500
12/31/2019 400,000 445,380 45,380 3,756,880
12/31/2020 400,000 450,826 50,826 3,807,706
12/31/2021 400,000 456,925 56,925 3,864,630
12/31/2022 400,000 463,756 63,756 3,928,386
12/31/2023 400,000 471,614 71,614 4,000,000

Requirement 3
2019
Jan 1 Loan receivable 4,000,000
Cash 4,000,000

Cash 350,000
Unearned interest income 350,000

Uneanred interest income 61,500

Cash 61,500

Dec. 31 Cash 400,000

Interest income 400,000

Unearned interest income 45,380

Interest income 4,538

2020
Dec. 31 Cash 400,000
Interest income 400,000

Unearned interest income 50,826

Interest income 50,826

2021
Dec. 31 Cash 400,000
Interest income 400,000
 Unearned interest income 56,925
Interest income 56,925

2022
Dec. 31 Cash 400,000
Interest income 400,000

Unearned interest income 63,756

Interest income 63,756

2023
Dec. 31 Cash 400,000
Interest income 400,000

Unearned interest income 71,614

Interest income 71,614

CASH 4,000,000
LOAN RECEIVABLE 4,000,000
Requirement 1
2019
Jan 1 Loan receivable 3,000,000
Cash 3,000,000

Direct origination cost 260,300

Cash 260,300

Cash 100,000
Direct origination cost 100,000

Dec. 31 Cash 240,000

Interest income 240,000

Interest income 50,382

Direct origination cost 50,382

8% 6%
Date Interest Received Interest income Amortization Carrying Amount
01/01/2019 3,160,300
12/31/2019 240,000 189,618 50,382 3,109,918
12/31/2020 240,000 186,595 53,405 3,056,513
12/31/2021 240,000 183,487 56,513 3,000,000

2020
Dec. 31 Cash 240,000
Interest income 240,000

Interest income 53,405

Direct origination cost 53,405

2021
Dec. 31 Cash 240,000
Interest income 240,000

Interest income 56,513

Direct origination cost 56,513

Cash 3,000,000
Loan receivable 3,000,000

Requirement 2
Noncurrent Asset:
Loan receivable 3,000,000
Direct origination cost 109,918
Carrying Amount 3,109,918
Requirement 1

Principal Amount 5,000,000

Direct origination cost incurred 457,500
Origination fee charged against borrower ₱ (200,000)
Carrying amount - Jan. 01, 2019 5,257,500

Requirement 2
10% 8%
Interest Carrying
Date received Interest income Amortization Amount
01/01/2019 5,257,500
12/31/2019 500,000 420,600 79,400 5,178,100
12/31/2020 500,000 414,248 85,752 5,092,348
12/31/2021 500,000 407,652 92,348 5,000,000

Requirement 3
2019
Jan. 1 Loan Receivable 5,000,000
Cash 5,000,000

Direct origination cost 457,500

Cash 457,500

Cash 200,000
Direct origination cost 200,000

Dec. 31 Cash 500,000

Interest income 500,000

Interest Income 79,400

Direct origination cost 79,400

2020
Dec. 31 Cash 500,000
Interest income 500,000

Interest income 85,752

Direct origination cost 85,752

2021
Dec. 31 Cash 500,000
Interest income 500,000

Interest income 92,348

 Direct origination cost 92,348

Cash 5,000,000
Loan receivable 5,000,000
Requirement 1

December 31, 2020 (1,000,000 x 0.93) 930,000

December 31, 2021 (2,000,000 x 0.86) 1,720,000
December 31, 2022 (3,000,000 x 0.79) 2,370,000
Total present value of loan 5,020,000

Loan receivable - 12/31/2019 6,000,000

Accrued interest (6,000,000 x 8%) 480,000
Total carrying amount 6,480,000
Present value of loan 5,020,000
Impairment loss 1,460,000

Requirement 2

2019 Impairment loss 1,460,000

Accrued interest receivable 480,000
Allowance for loan impairment 980,000

2020 Cash 1,000,000

Loan receivable 1,000,000

Allowance for loan impairment 401,600

Interest income (8% x 5,020,000) 401,600

2021 Cash 2,000,000

Loan receivable 2,000,000

Allowance for loan impairment 353,728

Interet income 353,728

2022 Cash 3,000,000

Loan receivable 3,000,000

Allowance for loan impairment 224,672

Interet income 224,672

Loan receivable - 12/31/2021 3,000,000

Allowance for loan impairment (578,400 - 353,728) 224,672
Carrying amount - 12/31/2021 2,775,328

Interest income for 2022 (8% x 2,775,328) 222,026

Allowance per book 224,672
Difference due to rounding 2,646
 8% Allowance INSTALLMENT CARRYING AMOUNT
2019 980,000 5,020,000
2020 401,600 578,400 1,000,000 4,421,600
2021 353,728 224,672 2,000,000 2,775,328
2022 224,672 - 3,000,000
222,026.24 Note: 222,026-224,672 due to rounding off

-
 (5,020,000+401,600-1,000,000)
(4,421,600+353,728-2,000,000)
(2775,328+224,672-3,000,000)
4,672 due to rounding off
Requirement 1

December 31, 2020 (500,000 x 0.89) 445,000

December 31, 2021 (1,000,000 x 0.80) 800,000
December 31, 2022 (2,000,000 x 0.71) 1,420,000
December 31, 2023 (4,000,000 x 0.64) 2,560,000
Total present value of loan 5,225,000

Requirement 2

Loan receivable 7,500,000

Accrued interest receivable (12% x 7,500,000) 900,000
Total carrying amount 8,400,000
Present value of loan 5,225,000
Impairment loan 3,175,000

Requirement 3

2019 Impairment loss 3,175,000

Accrued interest receivable 900,000
Allowance for loan impairment 2,275,000

2020 Cash 500,000

Loan receivable 500,000

Allowance for loan impairment 627,000

Interest income (12% x 5,225,000) 627,000

2021 Cash 1,000,000

Loan receivable 1,000,000

Allowance for loan impairment 642,240

Interest income 642,240

Loan receivble 1 12/31/2020 7,000,000

Allownce for loan impairment (2,275,000 - 627,000) 1,648,000
Carrying amount - 12/31/2020 5,352,000

Interest income for 2021 (12% x 5,352,000) 642,240

2022 Cash 2,000,000

Loan receivable 2,000,000

Allowance for loan impairment 599,309

Interest income 599,309
2022 Cash 4,000,000
Loan receivable 4,000,000

Allowance for loan impairment 406,451

Interest income 406,451
 12% INSTALLMENT CARRYING AMOUNT
2019 5,225,000.00
2020 627,000 500,000.00 5,352,000.00
2021 642,240 1,000,000.00 4,994,240.00
2022 599,309 2,000,000.00 3,593,548.80
2023 406,451 4,000,000.00 -

431226 2,593,548.80
 December 31, 2022 (360,000 x 0.772) 277,920
December 31, 2023 (360,000 x 0.708) 254,880
December 31, 2024 (360,000 x 0.650) 234,000
December 31, 2025 (4,360,000 x 0.596) 2,598,560
Total present value of loan 3,365,360

Face value of loan 4,000,000

Present value of loan 3,365,360
Impairment loss 634,640

2019 Cash 360,000

Interest income 360,000

Impairment loss 634,640

Allowance for loan impairment 634,640

2020 Allowance for impairment 302,882

Interest income (9% x 3,365,360) 302,882

2021 Allowance for impairment 331,758

Interest income (634,640 - 302,882) 331,758

2022 Cash 360,000

Interest income 360,000

2023 Cash 360,000

Interest income 360,000

2024 Cash 360,000

Interest income 360,000

2025 Cash 4,360,000

Interest income 360,000
Loan receivable 4,000,000
 Impairment 9% INSTALLMENT
2019 634,640
2020 302,882 no payment
2021 331,758 no payment
2022
2023
2019
Jan. 1 Loan receivable 3,000,000
Cash 3,000,000

Dec. 31 Cash (3,000,000 x 9%) 270,000

Interest income 270,000

Impairment loss 24,900

Allowance for loan impairment 24,900

Carrying amount - December 31, 2019 3,000,000

Present value of expected cash flows - December 31, 2019
(3,000,000 x 90% x 0.65) 1,755,000
Expected credit loss 1,245,000
Multiply by probability of default within 12 months 2%
12 month expected credit loss allowance 24,900

2020
Dec. 31 Cash 270,000
Interest income 270,000

Impairment loss 491,700

Allowance for loan impairment 491,700

Carring mount - December 31, 2020 3,000,000

Present value of expected cash flows - December 31, 2020
(3,000,000 x 60% x 0.71) 1,278,000
Expected credit loss 1,722,000
Multiply by probability of default within 4 years 30%
Lifetime expected credit loss allowance 516,600
Unadjusted allowance 24,900
Impairment loss 491,700

2020
Dec. 31 Cash 270,000
Interest income 270,000

Impairment loss 1,559,400

Allowance for loan impairment 240,600
Loan receivable 1,800,000

Carrying amount - December 31, 2021 3,000,000

Present value of expected cash flows - December 31, 2021
(3,000,000 x 40% x 0.77) 924,000
Expected credit loss 2,076,000
Lifetime expected credit loss 516,600
Impairment loss 1,559,400

Requirement 2

Loan receivable 3,000,000

Allownce for impairment loss 24,900
Net carrying amount - December 31, 2019 2,975,100

Loan receivable 3,000,000

Allowance for loan impairment 516,600
Net carrying amount - December 31, 2020 2,483,400

Loan receivable 3,000,000

Collection 1,800,000
Allowance for loan impairment (516,600-240,600) 276,000
Net carrying amount - December 31, 2021 924,000

Requirement 3

2022
Dec. 31 Allowance for loan impairment (924,000 x 9% 83,160
Interest income 83,160

2023
Dec. 31 Allowance for loan impairment (1,007,160 x 90,644
Interest income 90,644

2024
Dec. 31 Allowance for loan impairment 102,196
Interest income 102,196

Cash 1,200,000
Loan receivable 1,200,000