During 2006, Bay Co. constructed machinery for its own use and for sale to customers. Bank loans financed these assets both during construction and after construction was complete. How much of the interest incurred should be reported as interest expense in the 2006 income statement?
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Interest incurred for machinery for own use |
Interest incurred for machinery held for sale |
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a. |
All interest incurred |
All interest incurred |
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b. |
All interest incurred |
Interest incurred after completion |
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c. |
Interest incurred after completion |
Interest incurred after completion |
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d. |
Interest incurred after completion |
All interest incurred |