Rebecca is a calendar-year taxpayer who operates a business
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Rebecca is a calendar-year taxpayer who operates a business. She made the following business-related expenditures in December of year 0.
Indicate the amount of these payments that she may deduct in year 0 under both the cash method of accounting and the accrual method of accounting. (Leave no answers blank. Enter zero if applicable.)
d. $3,500 for interest on a short-term bank loan relating to the period from September 1, year O, through January 31, year 1.
Homework Answers
| Ans d | Deductible amt |
| Cash method (completely as paid in December of year 0) | $3,500 |
| Accrual method (3500/5*4 months ) | 2800 |
| If any doubt please comment |
$2,800 is the answer to both. Don't know how and couldn't have known this without the previous answer posted.
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