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ASC 310-20 dictates the US GAAP accounting for loan origination fees and requires that they be netted and deferred and amortized as an adjustment to the yield over the life of the loan.

Does it mean that I plug in the difference of Interest Receivable and Interest Revenue ??

my question raised from this problem

On December 1, Year 2, Tigg Mortgage Co. gave Pod Corp. a $200,000, 12% loan. Pod received proceeds of $194,000 after the deduction of a $6,000 nonrefundable loan origination fee. principle and interest are due in sixty monthly installment payment of $4450, beginning of January 1, years 3. the repayments yield an effective interest rate of 12% at a present value of $200,000 and 13.4% at a present value of $194,000. What amount of accrued interest receivable should Tigg include in its December 31, Year 1777, balance sheet?

answer 2,000

wiley says Adj Entry 12/31 is

interest receivable 2,000
Discount On N/R 166
interest revenue 2166

I just wonder how the 166 computed. I do understand that the discount on N/R is 6,000. From bond (similar topic) the discount is amortized over the life of bond. In this case I think the life of the related on is 60 days ? and 6,000/60 = 100… for amortization of discount..?

or is it just plug in thing???

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