For each transaction numbered 1 through 6 below, identify which accounting treatment-capitalized or expensed-should be used to properly account for the transactions.You may use each letter more than once or not at all.
-Interest paid on construction loan during the building period
A) Expensed immediately
B) Capitalized as part of the cost of the new asset

Question

Quizplus · Accepted Answer

Interest paid on a construction loan during the building period is capitalized as part of the cost of the new asset. This is because it is directly attributable to the acquisition, construction, or production of a qualifying asset.

For Each Transaction Numbered 1 Through 6 Below, Identify Which