Sunshine Incorporated provides solar energy services to Toronto. Sunshine needed to buy additional

solar energy panels to meet the demand for its energy product. The Government of Ontario offered

an interest$-$free forgivable loan to Sunshine in the amount of $$500,000.$ The loan will be forgiven if

Sunshine is able to produce a stated number of kilowatts of energy per year for the next five years. If

these conditions are not met, the amount is due to the government in full in five years. Sunshine

believes it will be able to meet the conditions. Sunshine recently obtained a similar loan from the

bank with an annual interest rate of $12\%.$

$($a$)$

Discuss the financial reporting issues related to obtaining the interest$-$free loan from the

government of Ontario.