Question
Construction was begun on June 1, 20X4 and was completed on December 31, 20X4. They made the capital expenditure payments listed in Instruction 1 to
Construction was begun on June 1, 20X4 and was completed on December 31, 20X4. They made the capital expenditure payments listed in Instruction 1 to Wilson, Inc. during the year. In order to help finance the construction, Ward issued the $7,500,000 of 10-year, 9% bonds payable, issued at par on May 31, 20X4, with interest payable annually on May 31. In addition to the bonds, the only other debt outstanding during 20X4 was a $1,250,000, 12% 10-year notes payable dated January 1, 20X1 with interest payable annually on January 1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost are as follows:
Payment Dates | Capital Expenditures | Capitalization Period | WA Accumulated Expenditures |
June 1 | $6,000,000 |
| (46) |
August 31 | 9,000,000 |
|
|
December 31 | 7,500,000 |
|
|
Total | ----------- | ---------- | (47) |
1.) What is the weighted average accumulated expenditure for June 1?
2.)What is the year-end total weighted average accumulated expenditures?
3.)What is the avoidable interest incurred during 20X4?
4.)What is the actual interest incurred during 20X4?
5.)What is the total amount of interest cost to be capitalized during 20X4?
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