Cranberry Corp constructed equipment to manufacture a new line of home products during 2016 . The average balance of accumulated expenditures on the equipment during September through December 2016 was $500,000 . Construction started on September 1, 2016 and was still in progress at the end of 2016 . If Cranberry borrowed $500,000 for one year on September 1, 2016, to finance the construction,
and the interest rate on the construction loan was 6%, how much interest can Cranberry capitalize as part of the equipment cost for 2016?
a. $ -0-
b. $10,000
c. $20,000
d. $30,000
b
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