Problem - Discuss with your team the following case study:
Client X contacted you for clarification and recommendations regarding whether the interest cost on construction of a new warehouse may be included in the cost of the new warehouse.
Write a response of a maximum of seven hundred words to include the following:
- Provide rational and clarifications of the proper treatment of interest cost under the rules of GAAP.
- Explain the impact of this interest cost on:
- Financial statements.
- Income statement.
- Balance sheet.
- Statement of owners' equity.