McGraw-Hill Educaton Correct \' Imported From imported From Fire Domain Manager

Question

McGraw-Hill Educaton Correct ' Imported From imported From Fire Domain Manager W Problems Help Save & Ex Chec Problem 9-52 (LO 9-1, LO 9-2) The following information applies to the questions displayed below) Christopher is a cash-method, calendar-year taxpayer, and he made the following cash payments related to his business this year Calculate the after-tax cost of each payment assuming he has a 30 percent marginal tax rate. (Do not round intermediate calculations and round your final answer to the nearest dollar amount.) Problem 9-52 Part-b b. $505 of interest on a short-term loan incurred in September and repaid in November. Half of the loan proceeds were u immediately to pay salaries and the other half was invested in municipal bonds until November 0

Explanation / Answer

Total Interest on loan =                              $505

Attributable to Municipal bond =               $252.5

Interest allowable for deduction =(505-252.5) = $252.5

After-tax Cost = 252.5*(1-0.3) = $176.75   Answer

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