Kingbird Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,968,000 on March 1, $1,248,000 on June 1, and $3,076,020 on December 31. Kingbird Company borrowed $1,145,430 on March 1 ona 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,433,900 note payable and an 10%, 4-year, $3,482,600 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate

Kingbird Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,968,000 on March 1, $1,248,000 on June 1, and $3,076,020 on December 31. Kingbird Company borrowed $1,145,430 on March 1 ona 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,433,900 note payable and an 10%, 4-year, $3,482,600 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate

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

EEE Co. decided to construct a building to expand its operations. The entity decided to obtain a 5-year specific loan from EFF Bank for $10.000.000 at 12% on December 31, 2018, to finance the construction of the building. The construction started on January 2, 2019 and the building was completed on December 31 of the same year. Payments were made as follows: January 2- $1,500,000 April 1- $2,000,000 June 1- $2,100,000 October 1- $1,700,000 December 1- $2,200,000. How much borrowing cost shall be capitalized? A .$1,100,000 B. $1,140,000 C. $1,200,000 D. $580,000 Can you please answer this proven by a solution?
Weld Corporation is constructing a plant for its own use. Weld capitalizes interest on an annual basis. The following expenditures are made during the current year: January 1, $102,000; July 1, $986,000; September 1, $2,720,000; and December 31, $7,174,000. The following debts were outstanding throughout the current year. Debt Construction note, 12% Short-term note payable, 15% Amount $340,000 1,360,000 Accounts payable (noninterest-bearing) 1,360,000 Note: Round all of your answers to the nearest whole number or whole percentage point. a. Compute the amount of interest to be capitalized during the year. Calculation of Actual Interest Debt Debt Amount Interest rate Interest Amount Specific Debt Construction loan $ 340,000 12 % $ 40,800 General Debt Note payable $ 1,360,000 15% Total Actual Interest $ 204,000✔ 244,800 Calculation of Weighted Average Accumulated Expenditures Weighted Avg. Date January 1 July 1 $ Expenditures 102,000 ✔ 986,000 ✔ Months outstanding Accum. Expenditures 12 $…
please give me answer
Ajay
On December 31, 2024, Tamarisk Inc. borrowed $3,960,000 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, $475,200; June 1, $792,000; July 1, $1,980,000; December 1, $1,980,000. 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 $198,000. Interest revenue of $64,680 earned in 2025. Your answer is correct Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. The amount of interest $ eTextbook and Media Date Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2025. (Credit account titles are…
Vikram
Headland Company is constructing a building Construction began on February 1 and was completed on December 31 . Expenditures were $2,076,000 on March 1,$1,224,000 on June 1 and $3,076,600 on December 31. Headland Company borrowed $1,155,090 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%,5-year, $2,376,900 note payable and an 10%,4-year, $3,397,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, es. 7.58%.
Your Corporation bought $450, 000 of equipment using an installment loan 1/1/20. The note provides for 4.5 % annual interest and equal annual payments of interest and principal of $91,395.50 on December 31 of each year. What is the amount of principal reduction related to the YEAR 2 payment?
Sweet Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $4,860,000 on March 1, $3,240,000 on June 1, and $8,100,000 on December 31. Sweet Company borrowed $2,700,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $5,400,000 note payable and an 11%, 4-year, $9,450,000 note payable. Compute avoidable interest for Sweet Company. Use the weighted-average interest rate for interest capitalization purposes. (Round "Welghted-average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest 2$