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Hello students, here is a question.
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Calibre bank loaned a 5 million critical company on january 1, 2019.
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Catechland company for 2019.
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The terms of a loan required to the principal payment of 1 million each year, 5 years plus interest of 8%.
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The principal and the interest payment is due on january 1, 2020.
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Calcane company made a requirement payment during 2020 and 2021.
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However, during 2021, calian company began to expertise the financial difficulties required calibre to resist the collectability of a loan.
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On december 31, 2012, calibre bank determined that they remind a principal payment will collect but collection of an investment is unlikely.
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Present value of 1 at 8 % is as follow.
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So, let us solve this.
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We have an option given in the question.
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We have to choose the right option for this.
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So, let us solve this problem.
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The present value of 1 is 8 % as follow.
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One period is 0 .93, for two periods it is 0 .86, for three periods it is 0 .79.
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To calculate the loan impairment loss on december 31, 2021, we need to determine the present value of remaining interest payment...