Barry and Larry,who Are Brothers,are Equal Owners in Chickadee Corporation

question 67

Multiple Choice

Barry and Larry,who are brothers,are equal owners in Chickadee Corporation.On July 1,2016,each loans the corporation $10,000 at an annual interest rate of 10%.Both shareholders are on the cash method of accounting,while Chickadee Corporation is on the accrual method.All parties use the calendar year for tax purposes.On June 30,2017,Chickadee repays the loans of $20,000 together with the specified interest of $2,000.How much of the interest can Chickadee Corporation deduct in 2016?

• A)$0
• B)$500
• C)$1,000
• D)$2,000
• E)None of the above

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Definitions:

Gentle Suction

A mild and careful application of suction, often used during medical procedures to clear bodily fluids without causing harm or discomfort to the patient.

Forcefully Blow

To expel air or another substance from the mouth, nose, or another body part with strong, sudden pressure.

Cognitive Impairments

A decrease in mental functions such as memory, attention, and decision-making.

Skin Assessment

The examination of the skin for abnormalities as part of a comprehensive health assessment.