Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business. Calculate the after-tax cost of each payment assuming she is subject to a 37 percent marginal tax rate. (Do not round intermediate calculation.)

c. $3,200 for football tickets to entertain out-of-town clients during contract negotiations.

d. $1,500 contribution to the mayors reelection campaign.

On November 1 of this year, Jaxon borrowed $42,000 from Bucksnort Savings and Loan for use in his business. In December, Jaxon paid interest of $3,780 relating to the 12-month period from November of this year through October of next year. (Do not round intermediate calculations.)

b. How much interest, if any, can Jaxon deduct this year if his business uses the accrual method of accounting for tax purposes?