Tenax Therapeutics' (TENX) CEO John Kelley on Q3 2015 Results-Earnings Call Transcript.
Debit the cost of the asset and credit the loan account with the capitalized interest. In the example, debit the asset cost and credit the loan account with $50,000. The asset cost available for depreciation at the end of Year One is therefore $1,050,000. Debit the interest expense account and credit the loan account with any interest paid in excess of the interest capitalized. For example, if the total interest paid in the first year was $75,000, debit the interest expense account and credit the loan account with $75,000 minus $50,000, or $25,000.
In detail in smaller deductions in Background Costs associated with a borrowing of money generally are required to be capitalized. For this purpose a borrowing means any issuance of debt, including the issuance of debt in an acquisition of capital or in a recapitalization.nsights from Private Company Services www.pwc.com Deducting unamortized debt issuance costs in refinancing transactions December 18, 2014 In brief Taxpayers generally must capitalize amounts paid to facilitate a debt issuance. Capitalized costs are amortized over the life of the loan using the appropriate methodology.