Question
January 1st Entry is as follows: Borrowed $1,500,000 with 8% note to help finance the construction which began for its own use on January 1st,
January 1st Entry is as follows: Borrowed $1,500,000 with 8% note to help finance the construction which began for its own use on January 1st, 2020. The facility is completed in 2022. Interest is payable at maturity.
Journal Entry for above:
Debit to Cash for $1,500,000
Credit to Notes Payable for $1,500,000
The company capitalizes the Interest related to facility construction, related to the construction loan on January 2nd , In addition to the construction loan on January 1st, the company had the following debt outstanding throughout 2021: $5,000,000 (12% bonds with 12% of market interest rate, interest payment on December 31st). What are the adjusting entries for end of year 2021, December 31st?
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