Question
1. Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,920,000 on March 1, $1,224,000
1. Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,920,000 on March 1, $1,224,000 on June 1, and $3,013,900 on December 31. Hanson Company borrowed $1,123,900 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,099,200 note payable and an 10%, 4-year, $3,713,500 note payable. Compute the weighted-average interest rate used for interest capitalization purposes
2. Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,836,000 on March 1, $1,308,000 on June 1, and $3,019,600 on December 31. Hanson Company borrowed $1,018,400 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,235,300 note payable and an 11%, 4-year, $3,673,500 note payable. Compute avoidable interest for Hanson Company. Use the weighted-average interest rate for interest capitalization purposes.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started