On January 1, 20X0, Jones Industries Entity (JIE) Borrows $1,000,000

On January 1, 20X0, Jones Industries Entity (JIE) borrows $1,000,000 to build a new qualifying asset. The terms of the agreement are that the entire loan amount will be paid exactly one year from the borrowing date. Additionally, the borrowed funds include a 10 percent interest payment at the time of repayment. All funds were borrowed specifically for this project. The firm has no other outstanding borrowings. Ignore time value of money. What amount of borrowing cost should be capitalized in the factory?

A) $1,000,000
B) $1,100,000
C) $100,000
D) None of the above.