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Early in 2020, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1,
Early in 2020, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2020 and was completed on December 31, 2020. Dobbs made the following payments to Kiner, Inc. during 2020: Date June 1, 2020 August 31, 2020 December 31, 2020 Payment $2,280,000 3,420,000 2,850,000 In order to help finance the construction, Dobbs issued the following during 2020: 1. $1,938,000 of 10-year, 9% bonds payable, issued at par on May 31, 2020, with interest payable annually on May 31. 2. 300,000 shares of no-par common stock, issued at $10 per share on October 1, 2020. In addition to the 9% bonds payable, the only debt outstanding during 2020 was a $484,500, 12% note payable dated January 1, 2016 and due January 1, 2023, with interest payable annually on January 1. Compute the amounts of each of the following: 1. Weighted average accumulated expenditures qualifying for capitalization of Interest cost. 2. Avoidable interest incurred during 2020. 3. Total amount of interest cost to be capitalized during 2020. si 1. Weighted average accumulated expenditures 2. Avoidable interest 3. Amount of interest cost to be capitalized
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