Calculate the capitalization interest rate.

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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Cullumber Inc. has the following general-purpose debt for the year ended December 31, 2023:

8%, 2-year note, issued January 1, 2023 for $365000
7.50% 5-year note, issued March 31, 2023 for $787000
9%, 20-year bond, issued October 1, 2023 for $1950000

Calculate the capitalization interest rate.

8.37%

8.33%

8.13%

6.08%

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