X Your answer is incorrect. When funds are borrowed to pay for construction of assets that qualify for capitalization of borrowing costs, the excess funds not needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be used to increase the cost of assets being constructed. O multiplied by an appropriate interest rate to determine the amount of borrowing costs to be capitalized. offset against interest cost incurred during construction. recognized as revenue of the period