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On December 31, 2009. Hurston Inc. borrowed $900.000 at 10% payable annually to finance the construction of a new building. In 2010, the company made
On December 31, 2009. Hurston Inc. borrowed $900.000 at 10% payable annually to finance the construction of a new building. In 2010, the company made the following expenditures related to this building: March 1, $600,000: July 1, $1,000,000: December 1, $1,200,000. Additional information is provided as follows. Other debt outstanding 10-year, 14% bond. December 31, 2003. interest payable annually $1,000,000 6-year, 10% note, dated December 31, 2007, interest payable annually $2,000,000 What is the weighted average accumulated expenditure? (3 points) What is the avoidable interest? (3 points) Assuming interest is paid on December 31, 2010. prepare the journal entry to record the cash payment for interest, the capitalization of interest and the recognition of interest expense, if any. at December 31, 2010. (3 points)
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