PROBLEM 5:

TALLNUT CORP. was granted by the local government of Bula, Camarines Sur a 5-

hectare land on January 1, 2021 for the planting of narra trees. The grant has a fair

value of Php 500,000. The grant requires that TALLNUT to farm only within Bula,

Camarines Sur for five years and require the entity to return part of the grant if it

farms for a period shorter than five years taking into consideration the portion

retained based on passage of time.

On January 1, 2024, TALLNUT violated the terms and conditions of the grant and the

grant becomes repayable.

Required: What are the necessary entries on 2021 until the repayment of the grant.