Omega Finance granted a 10%, 2-year P5,000,000 loan to Duchess Company onJanuary 1, 2017. The...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Omega Finance granted a 10%, 2-year P5,000,000 loan to Duchess Company onJanuary 1, 2017. The interest is payable every December 31 for each year during the term of the contract. Omega Finance incurred an origination cost of P328,326 but charge Duchess Company P150,000 as origination fee.The effective rate is now 8% after considering the origination costs and origination fee. After paying the interest that is due on December 31,2017, Duchess Company informed Omega Finance about their financial difficulty. Omega Finance has now considered that the loan to DuchessCompany is now impaired. Reliable estimate shows that the projected cashflows from the loan are as follows: P2,000,000 on December 31, 2018 andP3,000,000 on December 31, 2019.What amount of impairment loss on the loan should Omega Finance recognizeon December 31, 2017?a. None c. P462,963b.P373,371d. P668,723
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.