Question
Help Im stuck here. Could you do it in an excel file please? On January 1 2020, the company signed a contract for the construction
Help Im stuck here. Could you do it in an excel file please?
On January 1 2020, the company signed a contract for the construction of a new factory. To finance this expansion, the company obtained a specific $3,200,000 construction loan at an annual interest rate of 20% per year. The factory was completed on December 31 2020. The total construction cost (excluding borrowing and interest costs) was $3,200,000.
The loan financed the construction costs of the factory. Construction fees of $2,000,000 were paid to the construction on January 1 2020, with a further $1,200,000 paid to the contractor on October 1st 2020. The unused portion of this loan was invested on the money markets at a rate of return equal to 10% per year. The interest income and loan interest are already included in the ending trial balance above.
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