Max Murphey, a cash basis taxpayer, borrowed $10,000 from a bank for a business loan on August 1, to be repaid one year later. The interest for one year at 6 percent was deducted from the loan proceeds in advance. His interest deduction for the current year is: Question 17 options: 1) $250 2) $300 3) $400 4) $600 5) None of these