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Li Corp. purchased a container load of antiques for resale at an invoice cost of $1,500,000. The goods were paid for when they were shipped in early June. The container arrived in Canada at the end of August, and then at Li's location, by rail, at the end of September. The goods were then available for sale. Freight costs of $157,500 were paid in October. Li has recorded $112,500 of total interest expense from $2,500,000 of general borrowing over the year. Required: Prepare the adjusting journal entry to capitalize borrowing costs on inventory at year-end December 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 Record entry to capitalize borrowing cost. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >

Li Corp. purchased a container load of antiques for resale at an invoice cost of $1,500,000. The goods were paid for when they were shipped in early June. The container arrived in Canada at the end of August, and then at Li's location, by rail, at the end of September. The goods were then available for sale. Freight costs of $157,500 were paid in October. Li has recorded $112,500 of total interest expense from $2,500,000 of general borrowing over the year. Required: Prepare the adjusting journal entry to capitalize borrowing costs on inventory at year-end December 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 Record entry to capitalize borrowing cost. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >

FINANCIAL ACCOUNTING
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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Li Corp. purchased a container load of antiques for resale at an invoice cost of $1,500,000. The goods were paid for when they were shipped in early June. The container arrived in Canada at the end of August, and then at Li's location, by rail, at the end of September. The goods were then available for sale. Freight costs of $157,500 were paid in October. Li has recorded $112,500 of total interest expense from $2,500,000 of general borrowing over the year. Required: Prepare the adjusting journal entry to capitalize borrowing costs on inventory at year-end December 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 Record entry to capitalize borrowing cost. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >
Transcribed Image Text:Li Corp. purchased a container load of antiques for resale at an invoice cost of $1,500,000. The goods were paid for when they were shipped in early June. The container arrived in Canada at the end of August, and then at Li's location, by rail, at the end of September. The goods were then available for sale. Freight costs of $157,500 were paid in October. Li has recorded $112,500 of total interest expense from $2,500,000 of general borrowing over the year. Required: Prepare the adjusting journal entry to capitalize borrowing costs on inventory at year-end December 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 Record entry to capitalize borrowing cost. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >
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