Other Objective Questions Designate Whether the Following Expenses Are Fully Deductible (F), Partially

question 30

Multiple Choice

Other Objective Questions
Designate whether the following expenses are fully deductible (F) , partially deductible (P) , or nondeductible (N) in the year paid.
-On November 1, 2018, Hernandez Corporation (a cash-basis, calendar-year taxpayer) signed a 36-month lease with Taylor Realty Corporation for rental office space. The market rental rate for this office space is $2,000 per month but Hernandez was able to rent it for $1,900 per month by agreeing to prepay the rent for the entire 36-month period. How much can Hernandez deduct in 2018 rent expense?

• A) $68,400
• B) $22,800
• C) $4,000
• D) $3,800

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Definitions:

Sense of Belonging

A feeling of being accepted, valued, and included in a group or community.

Teamwork

The collaborative effort of a group to achieve a common goal effectively by working together cohesively.

Self-fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true due to positive feedback between belief and behavior.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, leading to a motivation for change.