Question
Basic eOur Company is building a project for its own use. We have been asked to calculate the amount of interest to be capitalized. 2019
Basic eOur Company is building a project for its own use. We have been asked to calculate the amount of interest to be capitalized. 2019 Payments: Specific construction debt: 31-Jan 615,000 $1,200,000, 4%, 5-year note, dated 12/31/18, 28-Feb 600,000 interest paid annually on 12/31 1-Jun 960,000 1-Dec 825,000 Other debt: 3,000,000 $1,125,000, 6%, annual interest paid 12/31, dated 12/31/18 $1,350,000, 9%, 10 year bonds, dated 12/31/17, interest paid 12/31
Please show your calculations.
1 How much is the weighted average of the accumulated expenditures? __________
2 How much is the weighted average of the interest rates on other debt? _________
3 How much is the avoidable interest? _________
4 How much is the actual interest? ________
5 How much is recorded as the interest expense? ________
6 How much interest should be capitalized? _______
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