The following transactions pertain to the general borrowings made during 2021 by Owshi Company in connection with the construction of the company’s new warehouse: • 8% bank loan- $2,400,000 • 6% short-term note- $1,600,000 • 8% long-term note- $2,000,000 The construction started on January 1, 2021 and the warehouse was completed on December 31, 2021. Expenditures on the warehouse were as follows: • January 1- $400,000 • March 31- $1,000,000 • June 30- $1,200,000 • September 30- $1,000,000 • December 31- $400,000 How much is the capitalizable borrowing cost of Owshi Company?
The following transactions pertain to the general borrowings made during 2021 by Owshi Company in connection with the construction of the company’s new warehouse: • 8% bank loan- $2,400,000 • 6% short-term note- $1,600,000 • 8% long-term note- $2,000,000 The construction started on January 1, 2021 and the warehouse was completed on December 31, 2021. Expenditures on the warehouse were as follows: • January 1- $400,000 • March 31- $1,000,000 • June 30- $1,200,000 • September 30- $1,000,000 • December 31- $400,000 How much is the capitalizable borrowing cost of Owshi Company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following transactions pertain to the general borrowings made during 2021 by Owshi Company in connection with the construction of the company’s new warehouse:
• 8% bank loan- $2,400,000
• 6% short-term note- $1,600,000
• 8% long-term note- $2,000,000
The construction started on January 1, 2021 and the warehouse was completed on December 31, 2021. Expenditures on the warehouse were as follows:
• January 1- $400,000
• March 31- $1,000,000
• June 30- $1,200,000
• September 30- $1,000,000
• December 31- $400,000
How much is the capitalizable borrowing cost of Owshi Company?
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