On December 31, 2017, Buffalo Company signed a $1,137,500 note to Carla Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Buffalo's financial situation worsened. On December 31, 2019, Carla Bank determined that it was probable that the company would pay back only $682,500 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,137,500 loan.
Determine the amount of cash Buffalo received from the loan on December 31, 2017.
Prepare a note amortization schedule for Carla Bank up to December 31, 2019.
Determine the loss on impairment that Carla Bank should recognize on December 31, 2019.