If a government entity provides an interest free loan to a company and the company accounts for the grant using the deferred revenue approach,

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When a company accounts for a government grant as a deferred revenue and the loan is interest-free, no interest expense is recorded because the loan does not bear interest. The deferred revenue approach involves recognizing the grant as income over the period in which the company incurs the related expenses.

If a Government Entity Provides an Interest Free Loan to a Company