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Question · Forgivable government loans

Brevane owes a public agency a loan of 200,000, which is waived if it keeps operating for five years. At 31 December, there is reasonable assurance that this condition will be met. Case convention: the waiver offsets staff costs already recognised, so the grant is taken to profit or loss for the year. Record the entry.

Balance of the government loan
200,000
Your answer
  1. Line 1

    Account Financial liability (government loan)

  2. Line 2

    Account Grant income

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