ABC Company obtained a loan of $100,000 at 10% annual interest rate on January 1, 2022. The loan was used to finance a project that qualifies for capitalization of borrowing costs. The company incurs $2,000 in loan processing fees and $1,500-in legal fees related to the loan. The project is completed on December 31, 2022. The weighted average cost of capital of ABC Company is 12%. Compute the amount of borrowing costs to be capitalized and the amount to be expensed in the income statement for the year ended December 31, 2022.

On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $26,000 each, and will be paid on December 31, 2021, 2022, and 2023. The last three are to be $41,000 each and will be paid on December 31, 2024, 2025, and 2026. Montgomery borrowed other money at a 12% annual rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)  Required:1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2021?2. How much interest expense on this note will Montgomery recognize in 2021?

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:         January 1, 2021 $ 1,080,000   March 1, 2021   900,000   June 30, 2021   320,000   October 1, 2021   700,000   January 31, 2022   720,000   April 30, 2022   1,035,000   August 31, 2022   1,800,000      On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,000,000 and $7,000,000 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 company’s fiscal year-end is December 31. Required: Calculate the amount of interest that Mason should…

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:         January 1, 2021 $ 1,080,000   March 1, 2021   900,000   June 30, 2021   320,000   October 1, 2021   700,000   January 31, 2022   720,000   April 30, 2022   1,035,000   August 31, 2022   1,800,000      On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,000,000 and $7,000,000 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 company’s fiscal year-end is December 31. Required:1. Calculate the amount of interest that Mason should…

kit Company borrows $6 million at 12% on January 1, 2019, specifically for the purpose of financing the construction of a building that is expected to take 18 montns to complete. Kit invests the total amount at 11 % until it makes payments for the construction project. During the first year of construction, kit incurs the following expenditures related to this construction project:                                                                                         1. Compute the amount of interest expense Kit would capitalize related to the construction of the building.                                                                   2. Compute the amou1nt of interest revenue kit would recognize.              3. Assume that kit uses IFRS. what amount of interest would be capitalized related to the construction of the building?

You are interviewing for an accountant position with Smith Industries. There are several candidates, and you intend to stand out. You learn the company is not satisfied with the timeliness of its information and its inventory management. The company manufactures custom-order holiday decorations and display items.  To show your abilities, you plan to recommend the company use a job order accounting system., include recommendations and why a job order costing system would be advantageous to the company.

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A corporation has decided to use borrowed capital to finance a portion of an equipment purchase. The equipment will be partially financed by borrowing $40,000 on a 2-year contract at 7% interest compounded annually, with the loan to be repaid in two equal EOY installments. The average inflation rate during this period is expected to be 2%. Determine the loan payment amount.

IvanhoeFurniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $10,500,000 on January 1, 2020. Ivanhoe expected to complete the building by December 31, 2020. Ivanhoe has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019   $4,200,000 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021   3,150,000 Long-term loan-11% interest, payable on January 1 of each  year. Principal payable on January 1, 2024   2,100,000   Assume that Ivanhoe completed the office and warehouse building on December 31, 2020, as planned at a total cost of $10,920,000, and the weighted-average amount of accumulated expenditures was $7,560,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and…

Stinson Corporation borrowed $85,000 at 8% compounded quarterly to buy a warehouse. Monthly payments of $1200 were made over the term of the loan. Construct a partial amortization schedule showing the last 2 payments. Determine the total amount paid to settle the loan. Show work, not just the answer. Determine the total principal repaid. Determine the total amount of interest paid. Show work, not just the answer.