Michelle owns 100% of the outstanding stock of Hill Corporation. Michelle is a cash method taxpayer and Hill Corporation is an accrual method taxpayer. Both taxpayers are calendar year taxpayers. In a bona fide transaction, Hill borrows some funds from Michelle. By the end of the current year, $8,000 interest had accrued on the loan. However, Hill Corporation does not pay the interest to Michelle until February of the following year. How are the two parties going to recognize the income and expense in this transaction?