Question
Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to
Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
| $1,000,000, 12% note | |||
| $4,000,000, 8% bonds | |||
Construction expenditures incurred were as follows:
| July 1, 2021 | $ | 600,000 | |
| September 30, 2021 | 900,000 | ||
| November 30, 2021 | 900,000 | ||
| January 30, 2022 | 840,000 | ||
The companys fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2021 and 2022.
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Fundamental financial accounting concepts
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
8th edition
978-0078025365
