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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Li Corp. purchased a container load of antiques for resale at an invoice cost of $1,300,000. The goods were paid for when they were
shipped in early June. The container arrived in Canada at the end of August, and then at Li's location, by rail, at the end of September.
The goods were then available for sale. Freight costs of $136,500 were paid in October. Li has recorded $137,700 of total interest
expense from $2,700,000 of general borrowing over the year.
Required:
Prepare the adjusting journal entry to capitalize borrowing costs on inventory at year-end December 31. (If no entry is required for a
transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations.)
View transaction list
Journal entry worksheet
<
Record entry to capitalize borrowing cost.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
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