I need help with discussion. Thank you! 4

New Wave Images is a graphics design firm that prepares its financial statements using a calendar year. Manny Kenn, the company treasurer and vice president of finance, prepares a classified balance sheet as of December 31. In January, this balance sheet will be submitted along with an application for a loan from First Peoples Community Bank. Manny is concerned about the accounts receivable balance. which includes a $56,000 loan to Tom Morrow, the company president. Tom Morrow borrowed the money from New Wave 18-months earlier for a down payment on a new home. Tom has orally assured Manny that he will pay off the loan within the next year. Because Tom is the company president. Manny treats the amount due as part of its normal accounts receivable. In addition, Manny knows that the bank will consider a large balance in accounts receivable more favorably than a large personal loan to a single individual. Manny reported the $56,000 in the same manner of the preceding year's balance sheet. Discussion Questions: 1. Is Manny behaving ethically by reporting the loan as a trade account receivable to Tom Morrow the president of New Wave Images rather than a personal loan? Why or why not? 2. Who will be affected by Manny's decision? 3. What are the GAAP requirements for this loan? How should it be recorded? Should Tom Morrow be required to pay interest? Why or why not