The amount of interest to capitalize is limited to the lower of actual interest cost incurred during the period or avoidable interest.

Select one:

a. False

b. True

X company exchanged old equipment with a new one. There is commercial substance of transaction. Cost of old equipment 15000, Accumulated depreciation of old equipment 7000, The list price of new equipment 20000, Trade in allowance for old 11000, Fair market value of old 11500. The cost of new asset is ---------

Select one:

a. $7000.

b. $20500.

c. $9000.

d. $8000.