Consider the following two scenarios:

Case A  On 27 February 20X7, JJJ Inc. upgraded its windows and doors in order to make the building green-certified. The upgrades have a 20-year useful life. JJJ will receive a 30% rebate on total cost if it can demonstrate reduced utilities draw by 50% over a 5-year period. The funds are received up front, upon submission of the costs. A report is filed annually over the next 5 years. Total amount spent on upgrades: $4,780,000.

Case B  RBH Inc. was provided with a $200,000 forgivable loan to help offset increased sick pay that was mandated by the government. The loan is intended to provide relief for the first 2 years of the program.

Required:

1. Prepare the journal entries: 

   1. Under both the net and the deferral method

   2. If it is netted against expenses or recorded as income 

2. Discuss the different presentation alternatives available, and why management may decide to use one over the other.