On January 1, an Enterprise Fund issues $1,000,000 of 6%, ten-year tax-exempt bonds to finance the construction of a new water treatment plant. During the year the Enterprise Fund earned $40,000 of interest income on the bond proceeds and incurred $600,000 of construction costs. What amount of interest cost should be capitalized for the year?

Answer rating: 100% (QA)

To determine the amount of interest cost that should be capitalized for the year we need to calculat... View the full answer