Early in 2015, Logan Corporation engaged Reese, Inc. to design and construct a complete modernization of Logan's manufacturing facility. Construction was begun on April 1, 2015 and was completed on December 31, 2015. Logan made the following payments to Reese, Inc. during 2015: Date Payment May 1, 2015 $2,400,000 July 31, 2015 3,600,000 December 31, 2015 3,000,000 In order to help finance the construction, Logan issued $2,000,000 of 10-year, 9% bonds payable, issued at par on January 1, 2015, with interest payable annually on December 31. In addition to the 9% payable, the only debt outstanding during 2015 was a $500,000, 14% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1 and a $1,000,000, 10% bond payable dated July 1, 2011 due June 30, 2021 with interest paid annually. Compute the amounts of each of the following (show computations): 1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost. 2. Interest to be capitalized in 2015. Logan uses the specific interest method. 3. Indicate the journal entry required to record the capitalized interest. DATE ACCOUNTS DEBIT CREDIT
Early in 2015, Logan Corporation engaged Reese, Inc. to design and construct a complete modernization of Logan's manufacturing facility. Construction was begun on April 1, 2015 and was completed on December 31, 2015. Logan made the following payments to Reese, Inc. during 2015:
| Date | Payment |
| May 1, 2015 | $2,400,000 |
| July 31, 2015 | 3,600,000 |
| December 31, 2015 | 3,000,000 |
In order to help finance the construction, Logan issued $2,000,000 of 10-year, 9% bonds payable, issued at par on January 1, 2015, with interest payable annually on December 31. In addition to the 9% payable, the only debt outstanding during 2015 was a $500,000, 14% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1 and a $1,000,000, 10% bond payable dated July 1, 2011 due June 30, 2021 with interest paid annually.
Compute the amounts of each of the following (show computations):
1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost.
2. Interest to be capitalized in 2015. Logan uses the specific interest method.
3. Indicate the
| DATE | ACCOUNTS | DEBIT | CREDIT |
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