[ANSWERED] Classification of Interest Expense . On January 1 of the current year, Scott borrows $80,000,…

Classification of Interest Expense . On January 1 of the
current year, Scott borrows $80,000, pledging the assets of his business as
collateral. He immediate ly deposits the money in an interest-bearing checking
account. Scott already had $20,000 in this account. On April 1, Scott invests
$75,000 in a limited real estate partnership. On July 1, he buys a new ski boat
for $12,000. On August 1, he makes a $10,000 capita l contribution to his
unincorporated business. Scott repays $50,000 of the loan on November 30 of the
current year. Classify Scott’s interest expense for the year.