According to the SEC,any breach of a loan covenant that existed at the balance sheet date that has not subsequently been cured should

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According to the SEC, any breach of a loan covenant that existed at the balance sheet date that has not subsequently been cured should be disclosed in the notes to the financial statements. This is because loan covenants are important contractual obligations that could affect the company's ability to meet its financial obligations, and investors and other financial statement users should be aware of any breaches. Option A is not appropriate as it suggests recording it as an adjustment, which is not accurate. Option C is not appropriate as the audit report is not the appropriate place to disclose such information. Option D is not appropriate as it goes against the SEC's requirement to disclose such breaches in the financial statements.

According to the SEC,any Breach of a Loan Covenant That