Exercise 10-24 (Algo) Interest capitalization [LO10-7]On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building wascompleted in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to theconstruction loan, Highlands had the following debt outstanding throughout 2021:$8,000,000, 14% bonds$2,000,000, 9% long-term noteConstruction expenditures incurred during 2021 were as follows:$ 880,0001,480,0001,136,000880,000680,000January 1March 31June 30September 30December 31Required:Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations.Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)X Answer is not complete.DateExpenditureWeightAverageJanuary 12$880,00012/12$880,000March 311,480,000 x9/12 O =111,000 XJune 301,136,000 x6/12 O568,000000 00 Construction expenditures incurred during 2021 were as follows:January 1March 31000 0881,480,0001,136,000880,000680,000June 30September 30December 31Required:Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations.Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)Answer is not complete.DateExpenditureWeightAverageJanuary 1$880,000 O x12/12 O =$880,000March 311,480,000 O x9/12111,000June 301,136,000 O x6/12 O568,000September 30880,0003/12 O220,000December 31680,0000/12 O=Accumulated expenditure$ 5,056,000$ 1,779,000CapitalizedInterestAmountInterest RateAverage accumulatedexpenditures$1,779,000Construction loan2,150,0000.All loans7.0 X %

Exercise 10-24 (Algo) Interest capitalization [L010-7] On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: $880,000 January 1 March 31 1,480,000 1,136,000 880,000 June 30 September 30 December 31 680,000 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculat Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) X Answer is not complete.

Exercise 10-24 (Algo) Interest capitalization [L010-7] On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: $880,000 January 1 March 31 1,480,000 1,136,000 880,000 June 30 September 30 December 31 680,000 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculat Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) X Answer is not complete.

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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View Policies Current Attempt in Progress On December 31, 2024, Blue Inc. borrowed $4,320,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $518,400; June 1, $864,000; July 1, $2,160,000; December 1, $2,160,000. The building was completed in February 2026. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $216,000. Interest revenue of $70,560 earned in 2025. The amount of interest Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. eTextbook and Media List of Accounts $ $5,760,000 EMBLY 2,304,000 DOLL
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