Petty Corp, a calendar year-end company, began construction of a bullding on April 1, 2020. On this date, the company purchased a tract of land for $200,000, paid closing fees of $10,000, and paid back taxes of $15,000. Additionally, Petty obtained a $500,000, 2-year, 12% loan on April 1, 2020 specifically for this project. The only other debt outstanding for Petty during all of 2020 is as follows: $5,000,000 of 5-year, 10% debenture bonds $2,500,000 of 10-year, 7% notes Petty made the following expenditures throughout 2020 to construct the building: Date of Payment Amount of Payment May 1, 2020 $240,000 July 1, 2020 300,000 December 1, 2020 615,000 December 31, 2020 400,000 The capitalization period begins on April 1, 2020. The building was completed on December 31, 2020.

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?

Skysong Co. is building a new hockey arena at a cost of $2,310,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $1,820,000 to complete the project. It therefore decides to issue $1,820,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 11%. Assume that on July 1, 2022, Skysong Co. redeems half of the bonds at a cost of $1,001,900 plus accrued interest. Prepare the journal entry to record this redemption. (to record Interest and to record reacquisition)

Crane Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6300000 on March 1, $5340000 on June 1, and $8850000 on December 31. Crane Company. borrowed $3170000 on January 1 on a5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year $6350000 note payable and an 11%, 4-year, $12050000 note payable. What is the actual interest for Crane Company?

Sunland Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2024 Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Debit 920,854 Credit…

Fowler Incorporated purchased $86,000 of bonds on January 1, 2024. The bonds pay interest semiannually and mature in 25 years, at which time the $86,000 principal will be paid. The bonds do not pay any amounts other than interest and principal. Fowler's intention is to collect contractual cash flows and eventually sell the bonds within the next couple of years if the price is right. During 2024, the fair value of the bonds increased to $102,000. Fowler reports investments under IFRS No. 9. How much unrealized gain or loss will Fowler include in 2024 net income with respect to the bonds? Unrealized gain (loss) reported in net income

On January 1, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 11% Long-term note, 10% Long-term note, 7% Required: Calculate the amount of interest capitalized in 2024 for the building using the specific interest method. Interest capitalized $ 1,500,000 2,000,000 4,000,000 $ 255,000

Coronado Co. is building a new hockey arena at a cost of $2,420,000. It received a downpayment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decides to issue $1,910,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Your answer is partially correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2024 Account Titles and Explanation Cash Premium on Bonds Payable…

On December 31, 2019, Riverbed Inc. borrowed $3,660,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $439,200; June 1, $732,000; July 1, $1,830,000; December 1, $1,830,000. The building was completed in February 2021. Additional information is provided as follows. 1.   Other debt outstanding         10-year, 14% bond, December 31, 2013, interest payable annually   $4,880,000     6-year, 11% note, dated December 31, 2017, interest payable annually   $1,952,000 2.   March 1, 2020, expenditure included land costs of $183,000     3.   Interest revenue earned in 2020   $59,780 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…

Pina Co. is building a new hockey arena at a cost of $2,510, 000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $ 2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10.0 %, 10- year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9% . Assume that on July 1, 2027, Pina Co. redeems half of the bonds at a cost of $1,079, 300 plus accrued interest. Prepare the journal entry to record this redemption.