The city of Oak Park constructed a new storage facility using the city's own public works employees.Construction costs were incurred in the amount of $900,000,plus $25,000 in interest on short-term notes used to finance construction.What amount should be capitalized as a capital asset?

Question

Quizplus · Accepted Answer

Interest on short-term notes is typically not capitalized for government construction projects, so only the construction costs of $900,000 should be capitalized as a capital asset.

The City of Oak Park Constructed a New Storage Facility