Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 10 - Acquisition and Disposition of Property, Plant, and Equipment - Review and Practice - Questions - Page 531: 10

Answer

Amount of interest to be capitalized is established by multiplying the average loan amount during construction (weighted average) by a set interest factor and the construction time in years. You should also less all revenues from the investment related to the borrowed funds.

Work Step by Step

As summarized above.
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