(Answered) Fergie works for the ab bank and she has borrowed 140000

Accounting

Fergie works for the AB Bank and she has borrowed $140,000 from the bank to purchase BHP Billy shares. The cost of the shares was $160,000. As a shareholder Fergie is entitled to dividends which are assessable income. The bank charged Fergie a fixed rate of 5% interest per annum on the loan. The loan was an interest only loan. This is a type 2 benefit as the AB Bank is unable to claim Input Tax Credits. What is the taxable amount of the loan for the year ended 31 March 2016?

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