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Zoe Corporation loans Beth, an employee, $100,000 on January 1, 2018 on an interest free basis. The loan is repayable by Beth at the end

Zoe Corporation loans Beth, an employee, $100,000 on January 1, 2018 on an interest free basis. The loan is repayable by Beth at the end of three (3) years, i.e. December 31, 2020. Assume the applicable federal rate with respect to such loan is 4 percent.

A. What are the consequences to Zoe Corp. for 2018?

B. What are the consequences to Beth for 2018?

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