Riva Borrows $10,000 That She Intends to Use for Purchasing

question 80

Multiple Choice

Riva borrows $10,000 that she intends to use for purchasing supplies for her business.She temporarily deposits the funds in her personal checking account.Prior to the deposit,the checking account held $40,000 of personal funds.Riva books a vacation for $6,000 and writes a check to the travel agency from her personal account.Later in the month,the business supplies bill arrives and Riva writes a check for $10,000 from the personal account.With respect to the interest expense on the $10,000 loan

• A)it will all be treated as trade or business expense.
• B)60 percent will be treated as personal interest expense and 40 percent as trade or business expense.
• C)it will all be treated as personal expense.
• D)20 percent will be treated as trade or business expense.

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Definitions:

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to self-imposed starvation.

Gourmet Meals

High-quality, often elaborate meals prepared with great skill and presented with attention to detail, typically associated with fine dining.

Authoritarian Manner

A leadership or parenting style characterized by strict discipline and adherence to rules, often without consideration for individual freedoms or input.

Hypokalemia

A medical condition characterized by lower than normal levels of potassium in the blood, which can affect muscle function and heart health.