Question
On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30,
On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows:
January 1, 2024 $ 225,000
September 1, 2024 $ 330,000
December 31, 2024 $ 330,000
March 31, 2025 $ 330,000
September 30, 2025 $ 225,000
The company borrowed $760,000 on a construction loan at 11% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,550,000 in 8% bonds payable outstanding in 2024 and 2025.
Interest (using the specific interest method) capitalized for 2024 was:
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Study Guide/Workbook For Use With Introduction To Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
3rd Edition
0072835249, 978-0072835243
