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Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000....

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Accounting

Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is required to pay 15% interest annually every December 31, from 20A until the principal is extinguished. Client ME has to make an equal annual principal payment of its obligation to commence December 31, 20A. An amount of P61,192 was paid by Client ME as its share from the origination fee totaling P161,192, and the rest was shouldered by the bank resulting to a 14.50% new effective interest rate. How much is the balance of the contra-asset account as of December 31, 20A?

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