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1. On January 2, 2020, Marigold Corp. began construction of a new citrus processing plant. The automated plant was finished and ready for use on

1.

On January 2, 2020, Marigold Corp. began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows:

January 2, 2020 $ 592000
September 1, 2020 1812000
December 31, 2020 1812000
March 31, 2021 1812000
September 30, 2021 1194000

Marigold Corp. borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $12360000 in 9% bonds outstanding in 2020 and 2021. The interest capitalized for 2020 was:

$556200

$448480

$143520

$185400

2.

Sheffield Company issues $26400000, 8%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 7%. What are the proceeds from the bond issue?

ff 3.5% 4.0% 7% 8%
Present value of a single sum for 5 periods

0.84197

0.82193 0.71299 0.68058
Present value of a single sum for 10 periods 0.70892 0.67556 0.50835 0.46319
Present value of an annuity for 5 periods 4.51505 4.45182 4.10020 3.99271
Present value of an annuity for 10 periods 8.31661 8.11090 7.02358 6.71008

$27486253

$27490323

$27497828

$26400000

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