Canton Incorporated is a calendar year (calendar year means that fiscal year ends on December 31), cash basis taxpayer. On October 1, 2021, Canton paid $4,800 to a security firm for night-time and weekend security services for the 24-month period beginning with October. Which of the following is true?

Multiple Choice

• As a cash basis taxpayer, Canton can deduct the $4,800 expense in 2021.

• Canton can deduct $600 in 2021, and the remaining $4,200 in 2022.

• Canton can deduct $600 in 2021, $2,400 in 2022, and $1,800 in 2023.

• None of these choices are true.