Question: Ms Knox recently loaned 20 000 to her closely held corporation
Ms. Knox recently loaned $20,000 to her closely held corporation, which needed the money for working capital. She sees no reason to document the loan other than as a “loan payable—shareholder” on the corporate balance sheet. She also sees no reason for her corporation to pay interest on the loan. What advice can you offer Ms. Knox concerning this related-party transaction?
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