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On January 1, 2024, DeComb Corporation engaged McKay, Inc. to design and construct a complete modernization of DeComb's manufacturing facility. Construction was begun on June
On January 1, 2024, DeComb Corporation engaged McKay, Inc. to design and construct a complete modernization of DeComb's manufacturing facility. Construction was begun on June 1, 2024 and was completed on December 31, 2024. DeComb made the following payments to McKay, Inc. during 2024: Date Payment June 1, 2024 $6,000,000 August 31, 2024 9,000,000 December 31, 2024 7,500,000 In order to help finance the construction, DeComb issued $2,916,667 of 10-year, 9% bonds payable, issued at par on January 1, 2024, with interest payable annually on January 1st. In addition to the 9% bonds payable, the only debt outstanding during 2024 was a $1,250,000, 12% note payable dated January 1, 2020 and due January 1, 2030, with interest payable annually on January 1. Required: Compute the amounts of each of the following (show computations): 1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost. 2. Avoidable interest incurred during 2024. 3. Total amount of interest cost to be capitalized during 2024
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