Example $2$

Assume that on November $1,2003,$ A Company contracted with $8$ Collow a building constructed for $$445,000.$ A Comp $2004.$

construction was completed and the building was ready for ${?}^{C{C}_4}$ December $31,2004.$ A Company had the following debt outstanding at $D_e$ : $2004.$

Specific Borrowings

$10\%,3-$year note to finance purchase of land and construction of the buify, dated December $31,2003$:$$80,000$

Other Borrowings

Case $1)10\%,5-$year note, dated December $31,2000$:$$200,000$

$12\%,10-$year note, dated December $31,1999$:$$100,000$

Case $2)10\%,5-$year note, dated December $31,2000$:$$100,000$

$12\%,10-$year note, dated December $31,1999$:$$50,000$

Solution