Question 2 2 pts Turnbull Corporation is constructing an office building that it

Question

Question 2 2 pts Turnbull Corporation is constructing an office building that it will use in its business. Construction of the building started in the current accounting period Turnbull paid its builder $250,000 toward construction of the building. During the period Turnbull had outstandingjilebt of $200,000 with an interest rate of 6% and pays interest at the end of the period. What amount of interest should Turnbull include in the cost of the building from the current period? e so $3,000 $12,000 $15,000

Explanation / Answer

Solution:

Interest to be included in cost of building from current year = Outstanding debt * rate of interest

= $200,000*6% = $12,000

Hence, 3rd option is correct.

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