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On January 1, 2021, Durney Co. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30,
On January 1, 2021, Durney Co. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows:
January 1, 2021 | $ | 200,000 | |
September 1, 2021 | $ | 300,000 | |
December 31, 2021 | $ | 300,000 | |
March 31, 2022 | $ | 300,000 | |
September 30, 2022 | $ | 200,000 | |
Durney borrowed $750,000 on a construction loan at 12% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,500,000 in 9% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was:
Multiple Choice
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$104,625.
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$87,875.
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$67,500.
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$86,805.
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