Rodney,the Sole Shareholder of a Calendar Year,accrual Basis C Corporation,loaned

Multiple Choice

Rodney,the sole shareholder of a calendar year,accrual basis C corporation,loaned the corporation a substantial amount of money on January 1,2010.The corporation accrued $25,000 of interest expense on the loan on December 31,2010.It pays the interest to Rodney,a cash basis taxpayer,on February 1,2011.Under these facts:

A) The corporation will be allowed to deduct the interest expense in 2010 and Rodney will be required to report the interest income in 2011.
B) The corporation will be allowed to deduct the interest expense in 2011 and Rodney will be required to report the interest income in 2010.
C) The corporation will be allowed to deduct the interest expense in 2011 and Rodney will be required to report the interest income in 2011.
D) The corporation will be allowed to deduct the interest expense in 2010 and Rodney will be required to report the interest income in 2010.
E) None of the above.