Question
On March 1, 2016, XYZ, Inc. obtained a $35,000,000 5-year loan at 12% to help finance construction of a building. During the year the company
On March 1, 2016, XYZ, Inc. obtained a $35,000,000 5-year loan at 12% to help finance construction of a building. During the year the company also had the following debt:
$2,000,000 Note Payable at 8.5%
$3,500,000 Note Payable at 7.8%
Calculate the weighted-average interest rates that management should use for interest capitalization purposes. Show your calculation in detail.
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Management Accounting
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
7th Edition
978-1760421144, 1760421146
