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4. The following information pertains to Our Companys self-constructed building project Our Company is building a project for its own use. We have been asked
| 4. | The following information pertains to Our Companys self-constructed building project | |||||||||
| Our Company is building a project for its own use. We have been asked to calculate the amount of interest to be capitalized. | ||||||||||
| 2021 Payments: | Specific construction debt: | |||||||||
| 1/31/21 | 415,000 | $900,000, 4%, 5-year note, dated 12/31/20, | ||||||||
| 2/28/21 | 500,000 | interest paid annually on 12/31 | ||||||||
| 6/1/21 | 860,000 | |||||||||
| 12/1/21 | 725,000 | Other debt: | ||||||||
| 2,500,000 | $825,000, 5%, annual interest paid 12/31, dated 12/31/20 | |||||||||
| $1,250,000, 7%, 10 year bonds, dated 12/31/17, interest paid 12/31 | ||||||||||
| a. | How much is the weighted average of the accumulated expenditures? | |||||||||
| b. | How much is the weighted average of the interest rates on other debt? | |||||||||
| c. | How much is the avoidable interest? | |||||||||
| d. | How much is the actual interest? | |||||||||
| e. | How much is recorded as the interest expense? | |||||||||
| f. | How much interest should be capitalized? | |||||||||
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