This year, Mike started a business on October 1st of this year and prepaid 13 months of rent on his shop at $1,750/month. Mike also has a loan and, in October, prepaid 6 months of interest at $500/month.

1. What is the maximum deduction that Mike will have this year under the tax cash method of accounting?

2. What is the maximum deduction that Mike will have this year under the tax accrual method of accounting?