80.2K

Verified Solution

Link Copied!

Capitalized interest On December 31, 2017, No Tricks, Ine, borrowed $1.000,000 at 10% payable annually to finines the construetion of a new building. In 2018 , the company made the following expenditures related to this building: June 1, $400,000; July 1, $600,000 : September 1, S1,200,000: December 1, $600,000. Determine the amount of interest to be capitalized as of December 31,2018 . The building was completed in April 2019. Additional information is provided as follows. 1. Other debt outstanding 10 -year, 8% bond, dated December 31,2010 , interest payable annually $10,000,000 15 -year, 10% note, dated December 31,2004 , interest payable annually 52,500,000 2. Interest revenue earned in 2018$6,000 (a) Compute Weighted-Average Accumalated Expenditures (b) Compute actual interest (c) Compute avoidable interest. (d) Prepare the journal entry to record the capitalization of interest and the recognition of interest exmense. if anv. at December 31. 2018. Determine acquisition costs to capitalize and expense. James Co. incurred the following costs to open a new manufacturing facility for its new product line during 2018. Determine the amount to be capitalized for land, land improvements, building, and equipment and what amount should be expensed. Amount to Expense

Answer & Explanation Solved by verified expert

See Answer