Which of the following interest expenses is taxable as a trading expense?

Overdraft interest is considered a taxable trading expense because it is incurred in the course of conducting business activities. When a business goes into overdraft, it usually indicates that it requires additional funds to manage cash flow and continue its operations. This type of interest expense is linked directly to the business's trading activities, which makes it deductible for tax purposes.

In contrast, personal loan interest is not deductible against business income because it does not relate to the production of income from trading activities. Interest on overdue taxes can also be non-deductible since it doesn't typically qualify as a business expense, and interest paid on bonds may not always meet the criteria for a trading expense depending on the context of the investment and its purpose within a business. Hence, the unique nature of overdraft interest as a necessary expense for managing business operations establishes it as a taxable trading expense.