A shareholder loaned $100,000 to the S Corp in TY2021 which was repaid in TY2022. Discuss the appropriate recording of the loan transactions for both years and the effect on shareholder basis for both years. State the applicable rules that apply to this situation.

A shareholder loaned $100,000 to the S Corp in TY2021 which was repaid in TY2022. Discuss the appropriate recording of the loan transactions for both years and the effect on shareholder basis for both years. State the applicable rules that apply to this situation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A shareholder loaned $100,000 to the S Corp in TY2021 which was repaid in TY2022. Discuss the appropriate recording of the loan transactions for both years and the effect on shareholder basis for both years. State the applicable rules that apply to this situation.

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