CullumberFurniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $13,000,000 on January 1, 2020. Cullumber expected to complete the building by December 31, 2020. Cullumber has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 $5,200,000 3,900,000 2,600,000

CullumberFurniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $13,000,000 on January 1, 2020. Cullumber expected to complete the building by December 31, 2020. Cullumber has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 $5,200,000 3,900,000 2,600,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 13C

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