Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i would like all parts filled out but i am confused as to if we only include other outstanding debt or the 1000000 at 10%

i would like all parts filled out but i am confused as to if we only include "other outstanding debt" or the 1000000 at 10% to compute actual interest as well.
image text in transcribed
Capitalized interest. On December 31, 2017, No Tricks, Ine. borrowed $1,000,000 at 10 \& payable annually to finance the construction of a new building. In 2018 , the company made the following expenditures related to this building: June 1, $400,000; July 1, $600,000; September 1. S1, 200,000 ; December 1, S600,000. Determine the amount of interest to be capitalized as of December 31,2018 . The building was completed in April 2019. Additional information is provided as follows. 1. Other debt ourstanding 10-year, 8% bond, dated December 31, 2010, interest payable annually $10,000,000 15-year, 10% note, dated December 31,2004 , interest payable annually 52,500,000 2. Interest revenuc earned in 2018$6,000 (a) Compute Weighted-Average Accumulated Expenditures (b) Compute actual interest (c) Compute avoidable interest (d) Prepare the journal entry to record the capitalization of interest and the recognition of interest

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions