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 team consensus response of no more than 700 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.