Windy Mountain Co$.($WMC$)$ received a forgivable loan from the Canadian government in Year $1.$ The loan of $$400,000$ is forgivable provided that WMC employs $10$ new people under the age of $30$ each year for Year $1$ through Year $4.$

Which of the following describes how WMC should account for this forgivable loan?

WMC should recognize $$400,000$ in income in Year $1,$ if it employs $10$ people under the age of $30$ each year.

WMC should recognize $$100,000$ each year in income from Year $1$ through

Year $4.$

C

D

WMC should recognize $$100,000$ each year into income from Year $1$ through

Year $4,$ if it employs $10$ people under the age of $30$ each year.

WMC should recognize a $$400,000$ loan and repay $$100,000$ each year.