Tenax Therapeutics' (TENX) CEO John Kelley on Q3 2015 Results-Earnings Call Transcript.
Debit the cost of the asset and credit the loan account with the capitalized interest. In the example, debit the asset cost and credit the loan account with $50,000. The asset cost available for depreciation at the end of Year One is therefore $1,050,000. Debit the interest expense account and credit the loan account with any interest paid in excess of the interest capitalized. For example, if the total interest paid in the first year was $75,000, debit the interest expense account and credit the loan account with $75,000 minus $50,000, or $25,000.
Capitalized Expenditure. The IRS requires the business owner to delay the tax deduction on some items, filing for depreciation of large expenses as a capitalized expenditure. You may claim three, five or seven years and deduct 33 percent, 20 percent or 14 percent each year until your item is fully depreciated.