During the Year, the Following Items Were Charged to the Interest

During the year, the following items were charged to the interest expense account of Doe Corporation: Interest on additional income taxes assessed two years ago $400
Interest on bank loan to finance installation of new machinery. Bank loan was refinanced when installation was completed
Interest deducted by bank from proceeds of Doe Corporation's 60- day note signed December 1, payable in full 60 days later
$700
$500
Fte maximum amount of interest expense that Doe Corporation, an accrual basis taxpayer, can deduct for the current year is:

A) $1,600
B) $1,100
C) $1,350
D) $700
E) None of the above