During 2020, Winsor Company constructed a machinery at a total cost of 57,100,000. The construction began on January 1 and was completed December 31, 2020. Actual expenditures during 2020 January 1 $1,000,000 February 29 $3,600,000 August 1 $2,400,000 December 31 $100,000 Total $7,100,000 The company had the following debt outstanding on December 31, 2020: 1. 9%, 5-year note to finance construction of machinery, dated January 1, 2020 $3,500,000 2 10%, 20-year bonds issued at par on July 1, 2018 $4,000,000 12%, 10-year note payable, dated January 1, 2019. $6,000,000 3 Instructions Compute the amounts of each of the following (show computations for each part). (Note: you may not use all rows/columns of the provided tables) 1. Weighted-average accumulated expenditures. (3 points) payment date 1Expediture 1-jan-20 1,000,000 29-feb-20 3,600,000 1-Aug-20 2400,000 31-Dec-20 100,000 7,100,000 annual interest 2. Avoidable interest. (4 points) Computation of weighted average interest rate: loan principal 20-years bonds 4,000,000 10% 10-years bonds 6,000,000 12% total 10,000,000 400,000 720,000 1,120,000 Avoidable interest principal 3,500,000 X = annual interest X 9.00 % 400,000 1,500,000 11.20% 720,000 5,000,000 1,120,000 3. Total actual interest cost. (3 points) principal 3,500,000 (9.00%) Actual interest cost 315.000 4,000,000 ($10.00) 400,000 6,000,000(12.00%) 720,000 13,500,00 1435.000 4. Total interest to be capitalized during 2020 is $ because avoidable cost is less than the actual interest 483.000 (2 points 5. Prepare the Journal entries needed on the book of Winsor Company to capitalize interest. (3 points) Account Debit Credit machinery 483,000 interest expense 483,000