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 | $ 250,000 |
|---|---|
| September 1, 2024 | $ 360,000 |
| December 31, 2024 | $ 360,000 |
| March 31, 2025 | $ 360,000 |
| September 30, 2025 | $ 250,000 |
The company borrowed $770,000 on a construction loan at 10% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,600,000 in 7% bonds payable outstanding in 2024 and 2025.
Interest (using the specific interest method) capitalized for 2024 was:
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College Accounting Chapters 1-9
Authors: James A. Heintz, Robert W. Parry
22nd Edition
1305666186, 9781305666184
