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