On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use.The building was completed in 2019. The company borrowed $1,500,000 at 8% on January 1 to help finance theconstruction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:$5,000,000, 12% bonds$3,000,000, 8% long-term noteConstruction expenditures incurred during 2018 were as follows:January 1 $ 600,000March 31 1,200,000June 30 800,000September 30 600,000December 31 400,000Required:Calculate the amount of interest capitalized for 2018 using the specific interest method.
On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use.The building was completed in 2019. The company borrowed $1,500,000 at 8% on January 1 to help finance theconstruction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:$5,000,000, 12% bonds$3,000,000, 8% long-term noteConstruction expenditures incurred during 2018 were as follows:January 1 $ 600,000March 31 1,200,000June 30 800,000September 30 600,000December 31 400,000Required:Calculate the amount of interest capitalized for 2018 using the specific interest method.
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use.
The building was completed in 2019. The company borrowed $1,500,000 at 8% on January 1 to help finance the
construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:
$5,000,000, 12% bonds
$3,000,000, 8% long-term note
Construction expenditures incurred during 2018 were as follows:
January 1 $ 600,000
March 31 1,200,000
June 30 800,000
September 30 600,000
December 31 400,000
Required:
Calculate the amount of interest capitalized for 2018 using the specific interest method.
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