Company N, an accrual basis taxpayer, owes $90,000 to Creditor K. At the end of 2016, Company N accrued $7,740 interest payable on this debt. It didn’t pay this liability until March 3, 2017. Both Company N and Creditor K are calendar year taxpayers. For each of the following cases, determine the year in which Company N can deduct the $7,740 interest expense:

Creditor K is a cash basis taxpayer, and Company N and Creditor K are unrelated parties

The answer is Year 2016 or Year 2017?