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On January 1 of the Current Year, Beverly Borrows $100,000

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Essay

On January 1 of the current year, Beverly borrows $100,000 from her employer, Happy Hills Nursing Home. Beverly uses this loan to pay off credit cards and consumer loans. Happy Hills considers Beverly to be a loyal employee, and allows her up to five years to repay the loan. Beverly is not a shareholder or officer in the Happy Hills. Happy Hills does not charge any interest on the loan. Both Happy Hills and Beverly are on a December 31 fiscal year end. What is the income tax issue for Happy Hills? You do not need to do any calculations.


Definitions:

Calculator

A calculator is an electronic device or software used for performing mathematical calculations.

Evaluate

To calculate or ascertain the numerical value or result of an expression or function.

Properties

The fundamental rules and characteristics that define mathematical operations, such as commutative, associative, and distributive properties.

Logarithms

The inverse operation to exponentiation, indicating the power to which a base number must be raised to obtain another number.

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