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htulnzed during 2017. 3-Capitalization of interest. Early in 2017, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility.
htulnzed during 2017. 3-Capitalization of interest. Early in 2017, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was June 1, 2017 and was completed on December 31, 2017. Dobbs made the folowing begun on payments to Kiner, Inc. during 2017: Date June 1, 2017 August 31, 2017 December 31, 2017 Payment $2,000,000 3,000,000 2,500,000 In order to help finance the construction, Dobbs issued the following during 2017 1, $1,700,000 of 10-year, 9% bonds payable, issued at par on May 31, 2017, with interest payable annually on May 31. 2. 300,000 shares of no-par common stock, issued at $10 per share on October 1, 2017 In addition to the 9% bonds payable, the only debt outstanding during 2017 was a $425,000, 12% note payable dated January 1, 2013 and due January 1, 2023, with interest payable annually on January 1. Instructions Compute the amounts of each of the following (show computations): 1. Weighted-average accumulated expenditures qualifying for capitalization of inter cost. 2. Avoidable interest incurred during 2017. 3. Total amount of interest cost to be capitalized during 2017
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