On December $1,$ Year $1,$ Michaels, a self$-$employed cash basis taxpayer, borrowed $$100,000$ to use in her

business. The loan was to be repaid on November $30,$ Year $2.$ Michaels paid the entire interest of $$12,000$ on

December $1,$ Year $1.$ What amount of interest was deductible on Michaels' Year $2$ income tax return $($assuming

the business interest expense deduction limitation does not apply$)?$

A$.$ $$12,000$

B$.$ $$11,000$

C$.$ $$1,000$

D$.$ $$0$