Question
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30,
On January 1, 2021, Kendall Inc. 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 | $ | 224,000 | |
| September 1, 2021 | $ | 318,000 | |
| December 31, 2021 | $ | 318,000 | |
| March 31, 2022 | $ | 318,000 | |
| September 30, 2022 | $ | 224,000 | |
Kendall borrowed $756,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,530,000 in 12% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was:
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
7th edition
978-0077632427, 77632427, 78025656, 978-0078025655
