Question
On July 31, 2014, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed
On July 31, 2014, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2014. To help finance construction, on July 31 Amsterdam issued a $643,200, 3-year, 10% note payable at Netherlands National Bank, on which interest is payable each July 31. $518,200 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 8% until November 1. On November 1, Amsterdam made a final $125,000 payment to Minsk. Other than the note to Netherlands, Amsterdams only outstanding liability at December 31, 2014, is a $37,700, 6%, 6-year note payable, dated January 1, 2011, on which interest is payable each December 31. Collapse question part
(a) Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2014. (Round answers to the nearest whole dollar, e.g. 5,275.)
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