Magna Corporation is provided a grant by a foreigner government for the purpose of acquiring land for a building site. The grant is a zero-interest loan for 5 years evidenced by a promissory note. The loan was granted on January 1, 2020 for 8,000,000. The market rate of interest is 6%. The present value of 1 for 5 periods at 6% is 0.7473. Assume that interest expense and grant income are not offset against each other, Determine the amount of interest reported in 2022 ,amount of grant income realized in 2023 and amount of deferred grant income as of December 31, 2024.
Magna Corporation is provided a grant by a foreigner government for the purpose of acquiring land for a building site. The grant is a zero-interest loan for 5 years evidenced by a promissory note. The loan was granted on January 1, 2020 for 8,000,000. The market rate of interest is 6%. The present value of 1 for 5 periods at 6% is 0.7473. Assume that interest expense and grant income are not offset against each other, Determine the amount of interest reported in 2022 ,amount of grant income realized in 2023 and amount of deferred grant income as of December 31, 2024.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 35CE
Related questions
Question
Magna Corporation is provided a grant by a foreigner government for the purpose of acquiring land for a building site. The grant is a zero-interest loan for 5 years evidenced by a promissory note.
The loan was granted on January 1, 2020 for 8,000,000. The market rate of interest is 6%. The present value of 1 for 5 periods at 6% is 0.7473.
Assume that interest expense and grant income are not offset against each other,
Determine the amount of interest reported in 2022 ,amount of grant income realized in 2023 and amount of deferred grant income as of December 31, 2024.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning