On January 1, 2021, the Mason Manufacturing Company began construction of a building to be...
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On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on October 31, 2022. Expenditures on the project were as follows:
January 1, 2021
$
4,000,000
March 1, 2021
1,800,000
June 30, 2021
2,000,000
October 1, 2021
2,800,000
January 31, 2022
450,000
April 30, 2022
783,000
August 31, 2022
1,080,000
On January 1, 2021, the company obtained a $5,000,000 construction loan with a 9% interest rate. The loan was outstanding all of 2021 and 2022. The companys other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 5% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The companys fiscal year-end is December 31.
How much interest would be capitalized in 2021?
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on October 31, 2022. Expenditures on the project were as follows:
|
|
|
|
January 1, 2021 | $ | 4,000,000 |
|
March 1, 2021 |
| 1,800,000 |
|
June 30, 2021 |
| 2,000,000 |
|
October 1, 2021 |
| 2,800,000 |
|
January 31, 2022 |
| 450,000 |
|
April 30, 2022 |
| 783,000 |
|
August 31, 2022 |
| 1,080,000 |
|
On January 1, 2021, the company obtained a $5,000,000 construction loan with a 9% interest rate. The loan was outstanding all of 2021 and 2022. The companys other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 5% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The companys fiscal year-end is December 31.
How much interest would be capitalized in 2021?
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