Chapter 1 Problem 5-24
2008
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 56,948
Interest income 56,948
(10%) (12%)
Date Interest received Interest income Amortization Carrying value
01/01/2008 3,807,900
12/31/2008 400,000 456,948 56,948 3,864,848
12/31/2009 400,000 463,782 63,782 3,928,630
12/31/2010 400,000 471,370* 71,370 4,000,000
*12% x 3,928,630 equals 471,435, or a difference of P65 due to rounding.
2009
Dec. 31 Cash 400,000
Interest income 400,000
65
2009
Dec. 31 Unearned interest income 63,782
Interest income 63,782
2010
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
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