Interest During ConstructionDexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexterborrowed $1 million specifically for the project by issuing a 10%, 5-year, $1 million note, which is payable on December 31 of Year 3.Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year.In Year 1, Dexter incurred costs as follows:January 1$360,000March 1540,000June 301,000,000November 1420,000Calculate Dexter's capitalized interest on the student condominium complex for Year 1.Capitalized interest = $

Capitalised interest is a borrowing cost that is incurred to acquire or construct a qualifying…

Answered: Dexter Construction Corporation is…

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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1.) An eligible Pag-IBIG member may borrow up to 80% of his total accumulated value (TAV) subject to the terms and conditions of the program. After a strong typhoon, Mang Liloy applied for a calamity loan of $30,000. The current interest rate for the calamity loan is 5.95% per annum. How much interest does Mang Liloy have to pay at the end of 1 year? 2.) How long will it take $200,000 to amount to half a million pesos if the simple interest rate is 8.25% per annum? 3.) Find the compound amount and interest if $400,000 is invested at 8% compounded quarterly for five years and six months.
On January 1, 20x1, Lawrence Lenders loaned $9.6 million to Wilkins Food Products, Inc. to purchase a frozen food storage facility. Wilkins signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the following for Lawrence Lenders: 1. Prepare the journal entry for lending the funds on January 1, 20x1. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment received on December 31, 20x1. 4. Prepare the journal entry for the third installment payment received on December 31, 20x3. Complete this question by entering your answers in the tabs below. Req 2 Saved Req 1 3 and 4 2021 Prepare an amortization schedule for the three-year term of the installment note. (Enter your answers in whole dollars.) Dec. 31 Cash…
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Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.4 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. 2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. 3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries on October 1, 2024, to record (a) the…
On January 1, 2023, the city government provided Swerte Company a zero interest, P6,000,000 loan with a 4-year term. Theprevailing market rate of interest for this type of loan is 8%. What is included in the entries on December 31, 2024? (PVF 3 decimals)A. Debit interest expense P352,800B. Credit income from grant P352,800C. Credit income from grant P381,024D. Credit interest expense P381,024
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Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $300,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required:1.Prepare the journal entry on January 1, 2024, for Holly Springs’ purchase of the lathe. 2.Prepare an amortization schedule for the three-year term of the note. 3.Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.
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