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Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1.2024 (a) ring.com $4,400.000 3,300,000 2,200,000 office and warehouse building on December 31, 2020, as planned at a total cost of $11,440,000, and the weighted-

Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1.2024 (a) ring.com $4,400.000 3,300,000 2,200,000 office and warehouse building on December 31, 2020, as planned at a total cost of $11,440,000, and the weighted-

FINANCIAL ACCOUNTING
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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Whispering Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $11,000,000 on January 1, 2020. Whispering expected to complete the building by December 31, 2020. Whispering has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 $4,400.000 3,300,000 2,200,000 Assume that Whispering completed the office and warehouse building on December 31, 2020, as planned at a total cost of $11,440,000, and the weighted- average amount of accumulated expenditures was $7.920,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, eg. 7.58% for computational purposes and round final answers to O decimal places, eg 5,275) Avoidable Interest
Transcribed Image Text:Whispering Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $11,000,000 on January 1, 2020. Whispering expected to complete the building by December 31, 2020. Whispering has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 $4,400.000 3,300,000 2,200,000 Assume that Whispering completed the office and warehouse building on December 31, 2020, as planned at a total cost of $11,440,000, and the weighted- average amount of accumulated expenditures was $7.920,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, eg. 7.58% for computational purposes and round final answers to O decimal places, eg 5,275) Avoidable Interest
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