Homework Answers
a.
New loan A/C $750,000.
Loss due to restructuring A/C $242,000.
To Accrued interest income A/C $192,000.
To old loan A/C $800,000.
b.
Accrued interest revenue $96,000.
To Interest Revenue $96,000.
c.
Carrying value at 2013.
Loan Amount - PV Of 1@12% @2013.
$800,000-$96,000= $704,000×0.635518 =$447404.67.
d.
Carrying value at 2019 before making any payment
Loan amount× PV of 1@10% @2019
$750,000×0.683013 =$512,259.75.
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Exercise 14-23
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2.
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Reducing the interest rate from 12% to 10%.
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Reducing the principal obligation from $3,700,000 to
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2.
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