A nonprofit residential property has received 2 forgivable loans to help fund it. The proceeds from these
Question:
A nonprofit residential property has received 2 forgivable loans to help fund it. The proceeds from these forgivable loans have been recognized as net assets with donor restrictions. These restricted balances are being released over the terms of 40-50 years. Loan A in the amount of $3,133,300 expires on 07/01/2043 and is amortized over 40 years (proceeds of $78,333 released annually). Loan B in the amount of $350,000 expires on 06/30/2053 and is amortized over 50 years (proceeds of $7,000 released annually). Both loans are forgiven upon expiration. There are no principal or interest payments involved.
Calculate both loans' proceed amounts released in the loan's first year.
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely