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On January 1, 2015, Wells Tech signed a $950,000 two-year construction contract. Wells secured $950,000 financing at 7%. In 2015, Wells paid out $650,000. Excess

On January 1, 2015, Wells Tech signed a $950,000 two-year construction contract. Wells secured $950,000 financing at 7%. In 2015, Wells paid out $650,000. Excess borrowed funds were invested, yielding $120,000 income. What should Wells report as capitalized interest at December 31, 2015?

A :

$ 75,000

B :

$ 120,000

C :

$ 26,250

D :

$ 45,500

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