YOU Company had a 6,000,000 notes receivable from ME Company due on December 31, 2019. The note bears 10% interest and yields 12%. The books reported...
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YOU Company had a ₱6,000,000 notes receivable from ME Company due

on December 31, 2019. The note bears 10% interest and yields 12%. The books reported accrued interest of ₱600,000 on this date. On the due date, because of financial distress being suffered by ME Company, YOU Company agreed to the restructuring and modification of the term as follows:


a. Reduction of Principal amount of 5,000,0000.
b. Reduction of interest to 8% payable annually beginning December 31,2020;
c. Effective interest rate as of date of restructuring is 14%.
d. Accrued interest on December 31,2019 was paid; and
e. Principal payment was reset to December 31, 2022.






REQUIRED:

-How much is the impairment loss recognized by YOU Company on December 31, 2019?
-At what amount should the restructured notes receivable be reported at December 31, 2020?

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Subject: Accounting, Business
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