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QUESTION FIVE On March 1,2024, Len Horvat receives a \$100,000 loan from his employer....

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Accounting

QUESTION FIVE
On March 1,2024, Len Horvat receives a \$100,000 loan from his employer. The loan bears interest at 1\% per year. The interest is payable monthly. The principal is repayable at the end of five years. Len uses \(\$ 90,000\) of the loan toward the purchase of his home. He uses the remaining \(\$ 10,000\) to purchase investments. Assume the prescribed interest rates for 2024 are \(4\%\) for the first quarter and \(5\%\) for the remainder of the year.
Determine the amount to be included in Len's employment income for tax purposes for 2024.
CPA Competency 6.3.2 Employee loans. Income tax reference: ITA 6(9),80.4(1),(4),(6),80.5,20(1)(c).
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