Harold,a Cash Basis Taxpayer,borrows $65,000 for His Business on a 2-Year

Harold,a cash basis taxpayer,borrows $65,000 for his business on a 2-year note from First City Bank on December 1,2013.To close on the loan agreement,Harold is required to prepay interest of $4,800 on December 1.How much interest can Harold deduct in 2013?

A) $ - 0 -
B) $ 200
C) $ 400
D) $2,400
E) $4,800