If a Government Entity Provides an Interest Free Loan to a Company

question 9

Multiple Choice

If a government entity provides an interest free loan to a company and the company accounts for the grant using the deferred revenue approach,

• A)no interest expense will be recorded.
• B)the interest element is initially recorded as Discount on Noted Payable.
• C)the interest element is amortized to Deferred Grant Revenue over the term of the loan.
• D)all of these.

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Definitions:

Fusible Plug

A safety device consisting of a metal plug with a fusible alloy that melts at a specific temperature, used to release pressure or fluids to prevent damage or explosions.

Fire Safety

Practices and measures designed to prevent, mitigate, and ensure safety against fire hazards in various settings.

Underhood Fire

A fire that occurs within the engine compartment of a vehicle, often caused by electrical faults or leaks of flammable fluids.

Supplemental Coolant Heater

An auxiliary heater used in vehicles to aid in heating the engine coolant, providing faster warm-ups in cold weather.