On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $6,000,000, 14% bonds $4,000,000, 9% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: $ 620,000 1,220,000 824,000 620,000 420,000 Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date January 1 March 31 June 30 Expenditure Weight Average X X X September 30 X December 31 Accumulated expenditure $ 0 = $ Amount Interest Rate Capitalized Interest Average accumulated expenditures S 0 X % = $ x % = S 0 0
On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $6,000,000, 14% bonds $4,000,000, 9% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: $ 620,000 1,220,000 824,000 620,000 420,000 Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date January 1 March 31 June 30 Expenditure Weight Average X X X September 30 X December 31 Accumulated expenditure $ 0 = $ Amount Interest Rate Capitalized Interest Average accumulated expenditures S 0 X % = $ x % = S 0 0
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 6PB
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