Question
On January 1, 2023, the Balmond Company began construction of a building to be used as its office headquarters. The building was completed on December
On January 1, 2023, the Balmond Company began construction of a building to be used as its office headquarters. The building was completed on December 31, 2024. Expenditures on the project were as follows:
| Expenditures for 2023 |
| Expenditures for 2024 | ||
| January 3 | 1,000,000 |
| January 31 | 300,000 |
| March 31 | 1,200,000 |
| March 31 | 500,000 |
| June 30 | 800,000 |
| May 31 | 600,000 |
| October 1 | 600,000 |
|
|
|
Florida had the following borrowings during 2023. The borrowings were made for specific and general purposes but the proceeds were used in part to finance the construction of a new building:
|
| Principal | Annual interest |
| 12% Construction loan | 2,000,000 | 240,000 |
| 7.6% Long-term note | 5,000,000 | 380,000 |
| 6% Mortgage payable | 3,000,000 | 180,000 |
All debts were outstanding during all of 2023 and 2024.
The interest capitalized at the end of December 31, 2023 is:
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Financial Accounting
Authors: Robert K. Eskew, Daniel L. Jensen
5th Edition
0070213550, 978-0070213555
