This is an auditing exercise. I need to either post a journal entry or discuss...
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Accounting
This is an auditing exercise. I need to either post a journal entry or discuss why one would not be required & then add FASB Codification to back up my results.
As indicated in the working papers, the accounts receivable from officers has increased from $57,643 to $84,670. The Board of Directors approved these loans which are in the form of demand notes. One of the staff assistants asked whether there was any intent to require officers to pay back these loans. Sam Best and Loren Steele, who each owe 1/2 of the total amount outstanding, agreed that while not much thought had been given to it, they imagined that they might someday repay the loans. On the other hand, they thought that the Board of Directors might forgive the loans some year in lieu of their annual bonus. What entry or disclosure, if any, is necessary in this circumstance?
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