On December 1,Robert,a Cash-Method Taxpayer,borrows $10,000 from the Bank for Use

question 24

Multiple Choice

On December 1,Robert,a cash-method taxpayer,borrows $10,000 from the bank for use in his business.Under the terms of the loan,the bank discounts the loan by $300,paying Robert the $9,700 cash proceeds.If Robert repays the loan next year,he may deduct

• A)$300 next year.
• B)$300 this year.
• C)$25 this year and $275 next year.
• D)nothing since the note is "noninterest-bearing."

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Definitions:

Continuous Distribution

A probability distribution in which the variable can assume an infinite number of values within a given range.

Normally Distributed Random Variable

A random variable that has its values following a normal distribution, characterized by its mean and standard deviation.

Standard Normal Random Variable

A random variable that follows a standard normal distribution.

Area

The extent or measurement of a surface or piece of land.