Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2021, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note requiring $31,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2021 and 2022 income statements for this note? 3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 and 3 Determine how much interest expense the company will include in the income statements and the amount of the liability the company will report in the balance sheets for this note for 2021 and 2022. (Do not round intermediate calculations. Round your answers to the nearest whole dollars.) 2021 2022 Interest expense Liability amount Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1, 2021, the company obtained a $3 million loan with a 12% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,230,000 720,000 380,000 670,000 990,000 1,305,000 2,340,000 On January 1, 2021, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $5,600,000 and $7,600,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted average method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements. Complete this question by entering your answers in the tabs below. Req 1 and 3 Reg 2 Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted average method and Complete this question by entering your answers in the tabs below. Req 1 and 3 Reg 2 Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted average method and interest expense that will appear in the 2021 and 2022 income statements. ("Round "Weighted average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Round your answers to the nearest whole dollar.) 2021 2022 Interest capitalized Interest expense Complete this question by entering your answers in the tabs below. Req 1 and 3 Reg 2 What is the total cost of the building? ("Round "Weighted average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Round your answer to the nearest whole dollar.) Total cost of building
