Show your Solutions. Emer Bank granted a P4,000,000 loan to Ho oh Company on January...
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Emer Bank granted a P4,000,000 loan to Ho oh Company on January 1, 2020. The annual interest of the loan is 12% payable semi-annually. The loan matures in two years. The effective interest rate on the loan is 16%.
(Round off present value factors up to four decimal point; only round off up to two decimals the final value)
Questions
1. What is the initial carrying amount of the loan?
2. How much is the interest income for the year 2020?
3. What is the balance of the discount on the loan as of December 31, 2020?
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