On December 1,2014,Delilah borrows $2,000 from her credit union to use in her business.Under the terms of the contract,Delilah actually receives $1,940 but is required to repay $2,000 in three months.
a.What amount may Delilah deduct as interest expense in 2014 and in 2015 if she is a cash basis taxpayer?
b.What amount may Delilah deduct as interest expense in 2014 and in 2015 if she is an accrual basis taxpayer?

Question

Quizplus · Accepted Answer

The Answer of On December 1,2014,Delilah borrows $2,000 from her credit union to use in her business.Under the terms of the contract,Delilah actually receives $1,940 but is required to repay $2,000 in three months.
a.What amount may Delilah deduct as interest expense in 2014 and in 2015 if she is a cash basis taxpayer?
b.What amount may Delilah deduct as interest expense in 2014 and in 2015 if she is an accrual basis taxpayer?

On December 1,2014,Delilah Borrows $2,000 from Her Credit Union to Use