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Why isn't the 1155090 loan used to calculate the weighted-average interest rate? Splish Company is constructing a building. Construction began on February 1 and was
Why isn't the 1155090 loan used to calculate the weighted-average interest rate?
Splish Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,076,000 on March 1, $1,224,000 on June 1, and $3,076,600 on December 31. Splish Company borrowed $1,155,090 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,376,900 note payable and an 10%, 4-year, payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.)
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