Barry and Larry, Who Are Brothers, Are Equal Owners in Chickadee

question 46

Multiple Choice

Barry and Larry, who are brothers, are equal owners in Chickadee Corporation. On July 1, 2017, 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, 2018, 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 2017?

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

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Syntactically Correct Sentences

Phrases or sentences that follow the rules of grammar and structure in a given language.

Biased Observations

The tendency to see and interpret events, objects, or data in a way that is influenced by one's expectations, beliefs, or experiences, often leading to errors in judgment.

Piaget's Theory

A comprehensive theory of cognitive development that outlines how children progress through a series of stages where they develop increasingly sophisticated ways of thinking.

Metacognition

Awareness or knowledge of one’s own cognitive processes and systems.