Plaintiff then hired Law Firm B to be co-counsel with Law Firm A. Shortly after the preliminary finding Plaintiff began discussing with a lawyer from Law Firm B a possible malpractice case against Law firm A. The arbitration panel then issued a final ruling against Plaintiff.
1 What Is Capitalized Cost on a Balance Sheet?  Interest on an investment is the rate your investment earns on the principal amount. Interest on a debt, such as loan, is the rate you must pay to the lender on the principal amount you borrowed. Capitalized interest is used in both accounting and lending and is the interest added to the principal balance of a loan for a long-term asset. When you make an investment in a fixed-income security, such as a corporate or government bond, you earn interest on your investment.
In our example the market interest rate on January 1, 2016 was 5% per semiannual period for 10 semiannual periods. The effective interest rate is multiplied times the bond's book value at the start of the accounting period to arrive at each period's interest expense.