Which of the Following Is the Recommended Approach to Handling

Multiple Choice

Which of the following is the recommended approach to handling interest incurred in financing the construction of property, plant and equipment?

A) Capitalize only the actual interest costs incurred during construction.
B) Charge construction with all costs of funds employed, whether identifiable or not.
C) Capitalize no interest during construction.
D) Capitalize interest costs equal to the prime interest rate times the estimated cost of the asset being constructed.