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

Question

Quizplus · Accepted Answer

If a government entity provides an interest free loan to a company and the company accounts for the grant using the deferred revenue approach, no interest expense will be recorded. However, the interest element is initially recorded as a Discount on Noted Payable, and this interest element is amortized to Deferred Grant Revenue over the term of the loan. So, all of these options are correct.

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