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On December 31, 2021 Jammie Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new office building. In 2022, Jammie had

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On December 31, 2021 Jammie Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new office building. In 2022, Jammie had the following expenditures related to the new office building: March 1, 2022 $360,000 June 1, 2022 $600,000 July 1, 2022 $1,500,000 December 1, 2022 $1,500,000 The office building was fully completed in February 2023. Jammie has other outstanding debt which included: 10 year, 13% bond, interest payable annually, $4,000,000 6 year, 10% note, interest payable annually. $1,600,000 March 1, 2021 expenditure included land costs of $150,000 Interest revenue earned in 2021 totaled $49,000. REQUIREMENTS: 1) Calculate the weighted-average accumulated expenditures. (3 pts) 2) Calculate the avoidable interest. (3 pts) 3) Calculate the actual interest. (3 pts) 4) Create the journal entry to record the capitalization of interest and the recognition of interest expense at the end of December 31, 2021. (3 pts) 8 pts D Question 2 Wertz Book Binding Corp. has recently hired you to work in the accounting department. An old machine plus $340 was exchanged for a new machine from Paper Pages Inc. Assume the following information about the machines: Wertz Book Binding (old Machine) $290 Paper Pages Inc. (new Machine) $270 Machine Cost Accumulated depreciation Fair Value 140 0 85 425 REQUIRED Assuming this transaction has commercial substance, prepare the needed journal entry for each company to record this exchange. (Each is worth 4 points)

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