Problem
Hope Still, chief executive of Great Divide Technologies, a state certified aircraft repair company, worked with her local bank to get $350,000 loan under the Paycheck Protection Program in early May 2020 that allowed her to keep paying her 19 employees. The loan would be fully forgiven if GDT uses at least 60% of the funds for payroll cost and the remainder for the interest on mortgages, rent and utilities. Otherwise, the loan plus 1% accrued annual interest must be repaid after two years. The company recorded the loan with a $350,000 credit to notes payable.
Prepare the appropriate journal entry GDT would record when the condition for debt forgiveness have been met assuming that GDT views the funding as being most closely aligned with guidance provided
i. For debt by FASB ASC 405-20/470-50
ii. For grants to not for profit organizations by FASB ASC 958-605
iii. For grants to business organizations by IFRS-IAS20