Discuss requirements of the forgivable loan


Problem: Suppose the federal government provides a four year forgivable loan of $ 20 Million to ocean falls company to acquire a production facility in Canada. Government will forgive $ 5 million for each year that the company employs at least 500 people in Canada. The facility costs $ 100 million and has a useful life of 20 years. Assume company is certain they will be able to meet the requirements of the forgivable loan Record this under gross and net method.

 

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Accounting Basics: Discuss requirements of the forgivable loan
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