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The Effects of a Below-Market Loan for $450,000 Made by a Corporation

Question 89

Multiple Choice

The effects of a below-market loan for $450,000 made by a corporation to its chief executive officer as an enticement to get him to remain with the company are:


A) The corporation has imputed interest income and dividends paid.
B) The employee has imputed compensation income and interest expense.
C) The employee has no income unless the funds are invested and produce investment income for the year.
D) The corporation has imputed interest expense.
E) None of the above.

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