{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-26T11:03:38-04:00", "answer_date": "2024-05-26 11:03:38", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1735632", "url": "\/study-help\/questions\/problem-1010-algo-interest-capitalization-weightedaverage-method-lo107-on-january-1735632", "question_creation_date_js": "2024-05-26T11:03:38-04:00", "question_creation_date": "May 26, 2024 11:03 AM", "meta_title": "[Solved] Problem 10-10 (Algo) Interest capitalizat | SolutionInn", "meta_description": "Answer of - Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1, 2021, the company obtaine | SolutionInn", "meta_keywords": "problem,10-10,algo,interest,capitalization,weighted-average,method,lo10-7,january,1,2021,company", "question_title_h1": " Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1, 2021, the company obtained a $3 million loan with a 11% interest rate.", "question_title": " Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1,", "question_title_for_js_snippet": "Problem 10 10 (Algo) Interest capitalization weighted average method LO10 7 On January 1, 2021, the company obtained a $3 million loan with a 11 interest rate The building was completed on September 30, 2022 Expenditures on the project were as follows January 1, 2021 March 1, 2021 June 30, 2021 $1,260,000 750,000 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 310,000 680,000 1,035,000 1,350,000 2,430,000 On January 1, 2021, the company obtained a $3 million construction loan with a 11 interest rate Assume the $3 million loan is not specifically tied to construction of the building The loan was outstanding all of 2021 and 2022 The company's other interest bearing debt included two long term notes of $5,700,000 and $7,700,000 with interest rates of 5 and 7 , respectively Both notes were outstanding during all of 2021 and 2022 Interest is paid annually on all debt The company's fiscal year end is December 31 Required 1 Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted average method 2 What is the total cost of the building 3 Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements ", "question_description": "\"image\"image\"image", "transcribed_text": "Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1, 2021, the company obtained a $3 million loan with a 11% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 $1,260,000 750,000 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 310,000 680,000 1,035,000 1,350,000 2,430,000 On January 1, 2021, the company obtained a $3 million construction loan with a 11% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $5,700,000 and $7,700,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted average method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.", "related_book": { "title": "Financial Accounting an introduction to concepts, methods and uses", "isbn": "978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003", "edition": "13th Edition", "authors": "Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/65.jpg", "uri": "\/textbooks\/financial-accounting-an-introduction-to-concepts-methods-and-uses-13th-edition-65", "see_more_uri": "" }, "free_related_book": { "isbn": "1649600852", "uri": "\/textbooks\/daniel-prophet-at-the-king-s-command-a-novel-978-1649600851-107652", "name": "Daniel Prophet At The King S Command A Novel", "edition": "" }, "question_posted": "2024-05-26 11:03:38", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/questions\/10-two-great-circle-arcs-on-the-earths-surface-leading-380824", "description": "10. Two great circle arcs on the Earth's surface leading out of London make an angle of 20. 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