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The Lannister Company, a publicly accountable entity, self constructed an asset in 20x3. Construction began on March 1, 20x3 and ended on December 31, 20x3
The Lannister Company, a publicly accountable entity, self constructed an asset in 20x3. Construction began on March 1, 20x3 and ended on December 31, 20x3 when the asset was put in productive use. The investments in the construction of the asset are as follows: Expenditure $3,500,000 Date March 1, 20x3 May 15, 20x3 August 31, 20x3 December 31, 20x3 2,200,000 4,300,000 1,000,000 The company took out a loan in the amount of $3,500,000 on March 1, 20x3. The intent of the loan was to finance the self- construction of the asset. Interest on the loan is 4.5%. In addition, the company has general borrowings as follows: $40,000,000, 5.2% bank loan outstanding all year, and $80,000,000, 3.5% bonds. These bonds were issued on February 28, 20x3 Assuming that the useful life of this asset is 30 years and the residual value is $500,000, what will depreciation expense be in 20x4
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