20 Part 1 of 2 Required information Problem 5-59 (LO 5-2) (Algo) [The following information applies to the questions displayed below) Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $37000 at the beginning of the year at a simple interest rate of 15 percent. Wally would have paid interest of 56,660 this year if the interest rate on the loan had been set at the prevailing federal interest rate 018 points ebook Problem 5-59 Part-a (Algo) .. Wally used the funds as a down payment on a speedboat and repaid the $37,000 loan (including $555 of interest) at year-end Does this loan result in any income to either party? Yes O No hetences Indicate the amount below Gross Income Pay More Wally A 21 2 of 2 Required information Problem 5-59 (LO 5-2) (Algo) [The following information applies to the questions displayed below) Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $37,000 at the beginning of the year at a simple interest rate of 15 percent, Wally would have paid interest of $6,660 this year if the Interest rate on the loan had been set at the prevailing federal interest rate Problem 5-59 Part-b (Algo) b. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year? Answer is complete but not entirely correct. Amount to be recognized $ 37,000