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Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loened him $20.000 at the beginning of the year at a simple interest rate of 1 percent. Wolly would have paid interest of $2,400 thic year if the interest rate on the loan had been set at the prevailing federal interest rate. Requlred: a. Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of interest) at year-end. 0-1. Does this loan result in any income to either party? o-2. Indicate the amount below. b. Assume instead that Pay More forgave the loan and interest on December 31. What amount of aross income does Wally recognize this year? Assume instead that Pay More forgave the loan and intereat on December a1. What arnount of gross income does Wally recognise this year? Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20.000 ot the beginning of the year at a simple interest rate of 1 percent Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate. Required: a. Wally used the funds as a down payment on a speedboat and repaid the $20.000 loan (including $200 of interest) at year-end a-1. Does this loan result in any income to either party? a-2. Indicate the amount below. b. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recogniz this year? Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of intereat) at yearend Does this loan result in any income to either party? ally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him 0.000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the erest rate on the loan had been set at the prevailing federal interest rate. quired: Wally used the funds as a down payment on a speedboat and repaid the $20.000 loan (including $200 of interest) at year-end. 0-1. Does this loan result in any income to either party? 22 Indicate the amount below. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize his year? Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year

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