Suppose that Foxx Ltd. borrowed enough money not only to make the purchase, but also to fund all of the other expenditures mentioned in the problem.

Suppose that Foxx Ltd. borrowed enough money not only to make the purchase, but also to fund all of the other expenditures mentioned in the problem. Interest was incurred from the date of borrowing, which was two months before construction expenditures commenced, until six months after construction of the building was completed. Discuss the proper accounting treatment for the interest charges, i.e., are they all expensed, all capitalised, or some expensed and some capitalised? Provide reasons for your conclusion.

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