Firm F, a calendar year taxpayer, owes a $200,000 long-term debt to an unrelated creditor. In December, it paid $14,160 to the creditor as interest for the 12-month period from the prior September 1 through August 31 of the following year.

Required:

1. Compute the deduction for this payment assuming that Firm F uses the cash method of accounting for tax purposes.
2. Compute the deduction for this payment assuming that Firm F uses the accrual method of accounting for tax purposes.