During 2020, Bass Corporation constructed assets costing $4,000,000. The weighted-average accumulated expenditures on these assets during 2020 was $2,400,000. To help pay for construction, $1,760,000 was borrowed at 10% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding $36,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $2,000,000, 10- year, 9% note payable dated January 1, 2014. What is the amount of interest that should be capitalized by Bass during 2020?

During 2020, Bass Corporation constructed assets costing $4,000,000. The weighted-average accumulated expenditures on these assets during 2020 was $2,400,000. To help pay for construction, $1,760,000 was borrowed at 10% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding $36,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $2,000,000, 10- year, 9% note payable dated January 1, 2014. What is the amount of interest that should be capitalized by Bass during 2020?

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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