During the year, the following items were charged to the interest expense account of Doe Corporation:
Interest on additional income taxes assessed two years ago $400
Interest on bank loan to finance installation of new machinery. Bank loan was refinanced when installation was completed $700
Interest deducted by bank from proceeds of Doe Corporation's 60-day note signed December 1, payable in full 60 days later $500
The maximum amount of interest expense that Doe Corporation, an accrual basis taxpayer, can deduct for the current year is: