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Basic eOur Company is building a project for its own use. We have been asked...

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Accounting

Basic eOur Company is building a project for its own use. We have been asked to calculate the amount of interest to be capitalized. 2019 Payments: Specific construction debt: 31-Jan 615,000 $1,200,000, 4%, 5-year note, dated 12/31/18, 28-Feb 600,000 interest paid annually on 12/31 1-Jun 960,000 1-Dec 825,000 Other debt: 3,000,000 $1,125,000, 6%, annual interest paid 12/31, dated 12/31/18 $1,350,000, 9%, 10 year bonds, dated 12/31/17, interest paid 12/31

Please show your calculations.

1 How much is the weighted average of the accumulated expenditures? __________

2 How much is the weighted average of the interest rates on other debt? _________

3 How much is the avoidable interest? _________

4 How much is the actual interest? ________

5 How much is recorded as the interest expense? ________

6 How much interest should be capitalized? _______

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