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03-01-2024
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Sea Manufacturing Corp. is constructing a new factory building. During the current calendar year, Sea made the following payments to the construction company:
January 2 $1,000,000
December 31 1,000,000
Sea has an 8%, three-year construction loan of $3,000,000.

What is the amount of interest costs that Sea may capitalize during the current year?
a. $0
b. $80,000
c. $160,000
d. $240,000

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