practice quiz questions - Question 1(4 marks Larry Engvall...

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Question 1 (4 marks) Larry Engvall works as the head news reporter for CBTV, a television station that was incorporated in Alberta. Through various employee stock purchase plans, Larry has purchased shares in the Company and currently owns 5,892 of the 73,650 outstanding shares. As a perk to its employees, CBTV regularly provides them with loans in order to invest in projects outside their employment. In 2008, the Company loaned $75,000 to Larry and he used the proceeds from this loan to purchase property near Merritt, BC. 75% of the Merritt property has been developed as a fishing lodge business, owned jointly by Larry and his wife. The remainder of the property has not been developed but Larry does not want to sell it in case he wants to expand in the future. The loan was made to Larry on July 1, 2008 and, at this time, he signed an agreement to repay the loan over three years in equal installments on June 30 of each year and, in addition, pay interest at 1% per annum.
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