Exeter Corporation Purchased a Piece of Equipment with a Price

Multiple Choice

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2015. The amounts below are related to the equipment purchase. Match the items below and explain why each revenue expenditure is not capitalized.
-The company financed the equipment purchase with a bank loan. Interest of $3,000 was paid on the loan during 2015.

A) This item should be included as part of the cost of the equipment.
B) This item should be considered a revenue expenditure.