FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question

Assuming interest costs related to an asset qualify for interest capitalization, which of the following best describes the determination of how much interest should be capitalized?

  1. The amount capitalized should be the average between the actual and avoidable interest amounts.
  2. The amount capitalized should be the higher of the actual or avoidable interest amounts.
  3. The amount capitalized should always be the actual interest amount.
  4. The amount capitalized should be the lower of the actual or avoidable interest amounts.
  5. The amount capitalized should always be the avoidable interest amount.
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