000. Jingle Corp makes several payments to Reindeer Corp during 2018. Jingle Corp ced the construction of the building with debt. The total debt of Jingle Corp and the cash ents made by Jingle Corp for the building are below. Assume that all interest is paid in on December 31. Specific Construction Debt 8%, 2-year note to finance the construction of the building, dated $100,000 January 1, 2018, with interest payable annually on December 31. Other Debt 3.55%, 10-year note payable, dated December 31, 2015, with $50,000 interest payable annually on December 31. 5.55%, 20-year note payable, dated December 31, 2009, with $500,000 interest payable annually on December 31. Expenditures Amount Date March 1, 2018 June 1, 2018 September 1, 2018 December 31 2018. $123,000 $45,000 $20,000 $32.000

000. Jingle Corp makes several payments to Reindeer Corp during 2018. Jingle Corp ced the construction of the building with debt. The total debt of Jingle Corp and the cash ents made by Jingle Corp for the building are below. Assume that all interest is paid in on December 31. Specific Construction Debt 8%, 2-year note to finance the construction of the building, dated $100,000 January 1, 2018, with interest payable annually on December 31. Other Debt 3.55%, 10-year note payable, dated December 31, 2015, with $50,000 interest payable annually on December 31. 5.55%, 20-year note payable, dated December 31, 2009, with $500,000 interest payable annually on December 31. Expenditures Amount Date March 1, 2018 June 1, 2018 September 1, 2018 December 31 2018. $123,000 $45,000 $20,000 $32.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

(a) What is the weighted average of accumulated expenditures?

(b) What is the avoidable interest for the building in 2018?

On January 1, 2018, Jingle Corp contracts with Reindeer Corp to construct a building for
$220,000. Jingle Corp makes several payments to Reindeer Corp during 2018. Jingle Corp
financed the construction of the building with debt. The total debt of Jingle Corp and the cash
payments made by Jingle Corp for the building are below. Assume that all interest is paid in
cash on December 31.
Specific Construction Debt
8%, 2-year note to finance the construction of the building, dated $100,000
January 1, 2018, with interest payable annually on December 31.
Other Debt
3.55%, 10-year note payable, dated December 31, 2015, with $50,000
interest payable annually on December 31.
5.55%, 20-year note payable, dated December 31, 2009, with $500,000
interest payable annually on December 31.
Expenditures
Amount
Date
March 1, 2018
June 1, 2018
September 1, 2018
December 31, 2018
$123,000
$45,000
$20,000
$32,000
Required:
Use the above information to answer the following questions.
(a) What is the weighted average of accumulated expenditures?
(b) What is the avoidable interest for the building in 2018?

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