Bree and Kyle are not related. During 2020, Bree loans Kyle $15,000, which he intends to use to establish a small business. Under the terms of the loan Kyle agrees to repay Bree the $15,000 plus interest (at a reasonable stated rate) over a five-year period. The business is unsuccessful, and Kyle is forced to file for bankruptcy in 2021. By the end of 2021, it is estimated that the creditors will receive only 25% of the amount owed. In 2022 the bankruptcy proceedings are closed, and the creditors receive 10% of the amount due on the debt. Requirement What is Bree's bad debt deduction for 2021? For 2022? (Complete all input fields. Enter a "0" if no bad debt deduction can be taken.)

Bree and Kyle are not related. During 2020, Bree loans Kyle $15,000, which he intends to use to establish a small business. Under the terms of the loan Kyle agrees to repay Bree the $15,000 plus interest (at a reasonable stated rate) over a five-year period. The business is unsuccessful, and Kyle is forced to file for bankruptcy in 2021. By the end of 2021, it is estimated that the creditors will receive only 25% of the amount owed. In 2022 the bankruptcy proceedings are closed, and the creditors receive 10% of the amount due on the debt. Requirement What is Bree's bad debt deduction for 2021? For 2022? (Complete all input fields. Enter a "0" if no bad debt deduction can be taken.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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