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Assume the company is constructing an asset which qualifies for interest capitalization. By the beginning of July $1,000,000 had been spent on the asset, and an additional $800,000 was spent during July. The following debt was outstanding for the entire month. 1.A note payable of $1,500,000, interest of 1.5% per month. 2.Bonds payable of $1,000,000, interest of 1% per month. Neither the note nor the bonds are specific borrowings related with the project. How much is the amount of interest to be caputalized? A. $18, 200 B. $25,000 C. $37,500 D $14,000 |
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