Bev Is the Sole Owner of Bev & Associates, an Accrual

Essay

Bev is the sole owner of Bev & Associates, an accrual basis corporation. In 2014, Bev & Associates has a bad year and Bev lends the corporation $50,000 to meet expenses. The corporation accrues interest expense of $5,000 on the loan from Bev, but does not pay the interest to her in cash.
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How much of the $5,000 in accrued interest expense can Bev & Associates deduct on its 2014 corporate tax return? Explain.