Question
James Williams, a cash basis taxpayer, burrows $10,000 from the Ajax Bank for an investment loan on August 1, 2020, the full $10,000 to be
James Williams, a cash basis taxpayer, burrows $10,000 from the Ajax Bank for an investment loan on August 1, 2020, the full $10,000 to be repaid on August 1, 2021, one year later. Interest for one full year at 6% is deducted in advance from the loan proceeds. What is James interest expense deduction amount for 2020?
A. $250
B. $300
C. $ 400
D. $600
E. None of the above
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Financial Accounting An Introduction to Concepts, Methods and Uses
Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis
14th edition
978-1111823450, 1-133-36617-1 , 1111823456, 978-1-133-3661, 978-1133591023
