On January 1, 2016, Basker Research Signed a Contract to Have

question 7

Multiple Choice

On January 1, 2016, Basker Research signed a contract to have Bob's Builders construct a laboratory building at a cost of $20,000,000. It was estimated that it would take four years to complete the project. Also on January 1, 2017, to finance the construction cost, Tolvin borrowed $20,000,000 payable in five annual installments of $4,000,000 plus interest at the rate of 7%. During 2017, Tolvin made the following construction-related expenditures:


What amount should Tolvin report as capitalized interest at December 31, 2017?

• A) $ 70,000
• B) $ 84,000
• C) $ 152,000
• D) $1,400,000

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