Final answer:
Both the $3,750 advertising expense and the $2,000 interest expense related to the purchase of a delivery truck are deductible business expenses for Drew's grocery store. Therefore, the correct answer is that both statements are correct.
Step-by-step explanation:
The question asks whether Drew can deduct certain expenses as business expenses for his grocery store. To answer this question, we need to consider the Internal Revenue Service (IRS) regulations on business expense deductions. Generally, business owners can deduct ordinary and necessary expenses that are directly related to running their business.
Statement I: $3,750 for advertising on the web. Advertising is a common business expense and typically deductible as it is both ordinary and necessary for promoting a business. Therefore, Drew can deduct this cost.
Statement II: $2,000 of interest expense related to the purchase of a new delivery truck. Interest on business loans is also generally deductible, so Drew can deduct the interest expense he incurs on the loan used to purchase a delivery truck for his business.
In conclusion, both statements are correct, and Drew can deduct both the advertising and interest expenses in the current year as business expenses, making the correct answer choice (c).