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Company A signed an agreement with a contractor to have a production facility built. The construction started on 01/01/2020 and continued until 06/01/2021. Company A
Company A signed an agreement with a contractor to have a production facility built. The construction started on 01/01/2020 and continued until 06/01/2021. Company A borrowed a bank loan to be used in financing of the construction. The following information on Company As bank loans is available:
ction facility built. The construction started on 01/0 following information on Company A's bank loans is available: Specific Construction Loan Other Loan Other Loan Date Borrowed 12/31/2019 10/10/2018 12/17/2016 Amount ($) 1,000,000 700,000 2.800,000 Annual Interest Rate 7 percent 8 percent 10 percent Term 4 years 9 years 7 years Company A incurred the following costs during the construction of the facility: Expenditure Date 01/01/2020 05/01/2020 08/01/2020 Expenditure Amount ($) 900.000 240,000 960,000 200,000 160,000 05/01/2021 06/01/2021 How much interest cost should Company A capitalize in 2021? O $81,347 O $79,333 O $74,161 $ O $73,018Step by Step Solution
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