Freddy Purchased a Certificate of Deposit for $20,000 on January

question 80

Multiple Choice

Freddy purchased a certificate of deposit for $20,000 on January 1,2011.The certificate's maturity value in two years (December 31,2012) is $22,050,yielding 5% before-tax interest.

• A) Freddy must recognize $2,050 gross income in 2012.
• B) Freddy must recognize $2,050 gross income in 2011.
• C) Freddy must recognize $1,000 (.05 ´ $20,000) gross income in 2011.
• D) Freddy must recognize $1,025 ($2,050/2) gross income in 2011 and 2012.
• E) None of the above.

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Definitions:

Difficulty Concentrating

A common cognitive issue where an individual finds it hard to maintain focus on tasks or activities.

Worrying

The act of feeling anxious or concerned about actual or potential problems, often leading to overthinking or stress.

Conversion Disorders

A mental condition where psychological stress is expressed through physical symptoms without an underlying medical cause.

Hypnotized

A state of altered consciousness characterized by increased suggestibility, relaxation, and focused attention.