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undefined On January 2, Chaz transfers cash of $87,400 to a newly formed corporation...

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Accounting

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On January 2, Chaz transfers cash of $87,400 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $21,850. The income is credited to its earnings and profits account. The corporation distributes $6,555 to Chaz. If an amount is zero, enter "0". a. How do Chaz and the corporation treat the $6,555 distribution? Chaz has a taxable dividend of $ 0 and the corporation has a deduction of $ 0 b. Assume instead that Chaz transfers to the corporation cash of $43,700 for stock and cash of $43,700 for a note of the same amount. The note is payable in equal annual installments of $4,370 and bears interest at the rate of 6%. No distributions are made during the year to Chaz. However, at the end of the year, the corporation pays an amount to meet the loan obligation(i.e., the annual $4,370 principal payment plus the interest due). Determine the total amount of the payment and its tax treatment to Chaz and the corporation. The corporate payment to Chaz totals $ Chaz has interest of $ and a note repayment of $ of which $ is taxable to Chaz. The corporation has a deduction of $

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