On 1 July 20X4, Theriout Corporation acquired a manufacturing plant in Cape Breton for $ 1,750,000. The plant, employing 50 workers, began operation immediately and is expected to be in operation for 16 years with no residual value. In connection with the purchase, the following government assistance was received:
a. Theriout received a loan from the provincial government to help buy the capital assets, in the amount of $ 1,200,000. The loan need not be repaid as long as the plant operates for at least 10 years and employs an average of 25 people each year. Theriout is optimistic about the prospects for the plant but is mindful of the high rate of business failure in Cape Breton.
b. Theriout received a subsidy for salary costs of $ 1,000,000 for the next two years as long as it meets the criteria in requirement (a) of hiring an average of 25 people per year.

Required:
1. Provide the entry to record the loan to purchase capital assets and the salary subsidy. Explain your choice of entry.
2. How much net depreciation expense on the manufacturing plant would be recorded in the year ended 31 December 20X4? Provide calculations.