Hawkins Corporation began construction of a motel on March 31, 2024. The project was completed on April 30, 2025. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $4,600,000, 6% note $20,440,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2024 $ 4,540,000 June 30, 2024 6,540,000 November 30, 2024 1,908,000 February 28, 2025 3,540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025.

Hawkins Corporation began construction of a motel on March 31, 2024. The project was completed on April 30, 2025. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $4,600,000, 6% note $20,440,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2024 $ 4,540,000 June 30, 2024 6,540,000 November 30, 2024 1,908,000 February 28, 2025 3,540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following selected transactions relate to liabilities of Chicago Glass Corporation for 2024. Chicago's fiscal year ends on December 31. On January 15, Chicago received $7,400 from Henry Construction toward the purchase of $70,000 of plate glass to be delivered on February 6. On February 3, Chicago received $7,100 of refundable deposits relating to containers used to transport glass components. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price. First quarter credit sales totaled $740,000. The state sales tax rate is 4% and the local sales tax rate is 2%. Required: Prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Culver Inc. has a fiscal year ending April 30. On May 1, 2023, Culver borrowed $10 million at 11% to finance construction of its own building. Repayments of the loan are to begin the month after the building's completion. During the year ended April 30, 2024, expenditures for the partially completed structure totalled $7 million. These expenditures were incurred evenly throughout the year. Interest that was earned on the part of the loan that was not expended amounted to $482,000 for the year. For situation 3, how much should be shown as capitalized borrowing costs on Culver's financial statements at April 30, 2024? (If an answer is zero, please enter O. Do not leave any fields blank.) Capitalized borrowing $
None
Do not give image format
Subject : Accounting
Kanta Company purchased a building and land with a fair market value of $600,000 (building, $425,000 and land, $175,000) on January 1, 2024. Kanta signed a 30-year, 13% mortgage payable. Kanta will make monthly payments of $6,637.20. Round to two decimal places. Explanations are not required for journal entries. Read the requirements. Requirement 1. Journalize the mortgage payable issuance on January 1, 2024. (Record debits first, then credits. Exclude explanations from any journal entries.) Accounts Debit Date 2024 Jan. 1 C Credit Requirements 1. Journalize the mortgage payable issuance on January 1, 2024. 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2024. 4. Journalize the second payment on February 28, 2024. Print Done
Edward purchased a new piece of equipment to be used in its new facility. The $445,000 piece of equipment was purchased with a $66,750 down payment and with cash received through the issuance of a $378,250, 9%, 5-year mortgage payable issued on January 1, 2022. The terms provide for annual installment payments of $97,245 on December 31. 1. Prepare an installment payments schedule for the first five payments of the notes payable 2. Prepare the journal entry related to the notes payable for December 31, 2022. 3. Show the balance sheet presentation for this obligation for December 31, 2022. (Hint: Be sure to distinguish between the current and long-term portions of the note.)
During 2022, Churchill Inc. constructed assets costing £4,200,000. The weighted- average accumulated expenditures on these assets the year was £2,600,000. Churchill took out a 7% construction loan of £4,000,000 on January 1, 2022, and funds not needed for construction were temporarily invested in short-term securities, yielding £30,000 in interest revenue. Other than the construction loan, the only other debt outstanding during the year was a £2,000,000, 5-year, 9% note payable dated January 1, 2018. What is the amount of interest that should be capitalized by Churchill during 2022? £152,000. £182,000. £280,000. £330,000. a. b. C. d.
Required information [The following information applies to the questions displayed below.] On January 1, 2021, Splash City issues $310,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 10%, the bonds will issue at $283,405. Required: 1. Complete the first three rows of an amortization table. (Round your intermediate and final answers to the nearest whole dollar.) Change in Carrying Value Interest Carrying Value Date Cash Paid Expense 1/1/21 6/30/21 12/31/21
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 September 1, 2018 December 31, 2018 $340,000 $510, 000 $510,000 $510,000 $340,000 March 31, 2019 September 3e, 2019 Dreamworld had $7,000,000 in 14% bonds outstanding through both years. Dreamworld's average accumulated expenditures for 2018 was: