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  3. on january 1, 2020, oceanic bank made a p1,000,000

On January 1, 2020, Oceanic Bank made a P1,000,000 8% loan. The P80,000 interest is...

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Accounting

On January 1, 2020, Oceanic Bank made a P1,000,000 8% loan. The P80,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 2020, the first year's interest of P80,000 has not ye been received because the borrower is experiencing financial difficulties. The borrower negotiate a restructuring of the loan. The payment of all the interest for 5 years will be delayed until the end of the 5-year loan term. In addition, the amount of principal repayment will be dropped from P1,000,000 to P500,000. The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 2020 in connection with the loan. What amount should be reported as interest income for 2021? *

a.80,000

b.52,920

c.48,960

d.0

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