On Dec. 15, 2018, Julia’s Service Station, an accrual-method taxpayer, prepaid $3,000 worth of deductible interest on a business loan. The interest won’t accrue until 2019.

Julia’s Service Station will be displaying for the first time at a trade show in July 2019. On Dec. 16, 2018, Julia’s prepaid the $6,000 trade show booth rental expense. The payment isn’t due until May 2019, and use of the booth will occur in July 2019.

In addition, On Dec. 28, 2018, Ed’s Equipment repaired some equipment in Julia’s business and billed Julia’s $5,000. Julia’s received the invoice on Dec. 28, 2018 and paid the $5,000 invoice on Jan. 29, 2019.

How much of the $14,000 in deductible business expenses may Julia’s Service Station deduct in 2018?

Answer rating: 100% (QA)

Julias Service Station can deduct 3000 of the 14000 in deductible business expenses in 2018 Heres wh... View the full answer