LR Corporation Is a Cash Basis Business

Multiple Choice

LR Corporation is a cash basis business.LR signed a six-month, 12% note payable of $10,000 on October 1, 2022.By recording the interest expense related to the note only when it is paid on April 1, 2023, LR will understate expenses by ________ on its year-end financial statements on December 31, 2022.

A) $300
B) $600
C) $0
D) $11,200