Janine's employer loaned her $5,000 this year (interest-free) to buy a used car. If the federal interest rate was 4%, which of the following is correct?

Janine recognizes $200 of taxable interest income.

Janine's employer recognizes $200 of deductible interest expense.

Janine recognizes $200 of imputed compensation income.

Janine recognizes $200 of imputed dividend income.

None of the choices are correct.