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George Coffin received $2,000,000 in cash from the ESOP at the time of sale on April 1, 2020. The ESOP will borrow the $2 million

George Coffin received $2,000,000 in cash from the ESOP at the time of sale on April 1, 2020. The ESOP will borrow the $2 million from a local bank at 7% interest for five years. The ESOP will make 10 equal payments to the bank. Payments will be due every six months beginning on July 1, 2020. 2. George Coffin will receive 20% of the annual depreciation allowance beginning on Feb. 1, 2021. The payments will continue until the buildings and equipment are fully depreciated. Use the 5-year MACRS on page 398 in the textbook to answer the questions that follow the offer. 3. In 2026, when the final payment from annual depreciation is made, Coffin will receive $2 million if the annual sales revenue has reached $16 million in 2025. The $2 million cash payment will be made in April 2026. Coffin believes the likelihood of the company reaching that sales figure is 90%.

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