Exercise 18-24 (Algorithmic) (LO. 5) On January 2, Chaz transfers cash of $154,600 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $38,650. The income is credited to its earnings and profits account. The corporation distributes $11,595 to Chaz. If an amount is zero, enter "O". a. How do Chaz and the corporation treat the $11,595 distribution? Chaz has a and the corporation has a deduction of s b. Assume instead that Chaz transfers to the corporation cash of $77,300 for stock and cash of $77,300 for a note of the same amount. The note is payable in equal annual installments of $7,730 and bears interest at the rate of 6%. No distributions are made during the year to Chaz. However, at the end of the year, the corporation pays an amount to meet the loan obligationci.e., the annual $7,730 principal payment plus the interest due). Determine the total amount of the payment and its tax treatment to Chaz and the corporation. The corporate payment to Chaz totals Chaz has interest of and a note repayment of of which s is taxable to Chaz. The corporation has a deduction of