On October 1, 2019, Fine Brands Corporation (A Cash-Basis, Calendar-Year

question 41

Multiple Choice

On October 1, 2019, Fine Brands Corporation (a cash-basis, calendar-year taxpayer) borrowed $200,000 from the bank at 9% annual interest.On December 30, 2019, Fine Brands paid $18,000 to the bank for the first year's interest on the loan.How much can Garcia deduct in 2019 for interest expense?

• A)$1,500
• B)$1,620
• C)$4,500
• D)$18,000

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Definitions:

Productive Work

Activities that directly contribute to producing goods or providing services that are valued by customers or the organization.

Hybrid Automobiles

Vehicles that use more than one form of onboard energy to achieve propulsion, typically combining an internal combustion engine with an electric motor.

Round-Trip

Refers to a journey or transport route that goes from one place to another and then returns to the starting point.