20. On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 September 1, 2021 December 31, 2021 March 31, 2022 September 30, 2022 $320,000 $390,000 $390,000 $390,000 $320,000 Kendall borrowed $780,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,650,000 in 12% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was: A. $126,315. B. $108,495. C. $109,565. D. $52,650.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

I know what the answer is, I just need to know how to get it. The correct answer is apparently B, but I don't know how that is. I got $158,160, but that clearly isn't an answer choice.

20. On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The
system was finished and ready for use on September 30, 2022. Expenditures on the project were as
follows:
January 1, 2021
September 1, 2021
$320,000
$390,000
$390,000
$390,000
$320,000
December 31, 2021
March 31, 2022
September 30, 2022
Kendall borrowed $780,000 on a construction loan at 9% interest on January 1, 2021. This loan was
outstanding throughout the construction period. The company had $4,650,000 in 12% bonds
payable outstanding in 2021 and 2022.
Interest (using the specific interest method) capitalized for 2022 was:
A. $126,315.
B. $108,495.
C. $109,565.
D. $52,650.
Transcribed Image Text:20. On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 September 1, 2021 $320,000 $390,000 $390,000 $390,000 $320,000 December 31, 2021 March 31, 2022 September 30, 2022 Kendall borrowed $780,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,650,000 in 12% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was: A. $126,315. B. $108,495. C. $109,565. D. $52,650.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Types of Property
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education