During the year of assessment 2022/23, Trendy Limited borrowed $1 million from Bank of China (HK) Limited at 9% interest rate per annum. The loan was secured by a fixed deposit in the amount of $1 million placed outside Hong Kong earning interest income of 9% per annum. There was no other security for the $1 million loan. In the year of assessment 2022/23, Trendy Limited earned tax-free interest of $90,000 from the deposit and paid interest of $90,000 on the loan to Bank of China (HK) Limited. 

What will be the amount of interest expenses allowable for deduction in 2022/23? 

a. $45,000 

b. $180,000 

c. $0 

d. $90,000

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is c 0 Trendy Limite... View the full answer