On December 31 borrowed this question solution general accounting On December 31, 2016, Marin Inc. borrowed $3,900,000 at 12% payableannually to finance the construction of a new building. In 2017, the companymade the following expenditures related to this building: March 1, $468,000;June 1, $780,000; July 1, $1,950,000; December 1, $1,950,000. The building wascompleted in February 2018.Additional information is provided as follows.1. Other debt outstanding10-year, 13% bond, December 31, 2010, interest payableannually$5,200,0006-year, 10% note, dated December 31, 2014, interest payableannually$2,080,0002. March 1, 2017, expenditure included land costs of $195,0003. Interest revenue earned in 2017$63,700Determine the amount of interest to be capitalized in 2017 in relation to theconstruction of the building.

Step 1: Define Capitalized InterestThe accumulated interest amount added to the face value of…

Answered: On December 31, 2016, Marin Inc.…

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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On December 31, 2016, Headland Inc. borrowed $840,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: June 1, $336,000; July 1, $504,000; September 1, $1,008,000; December 1, $504,000. The building was completed in April 2018. Additional information is provided as follows. 1. Other debt outstanding 10-year, 10% bond, dated December 31, 2010, interest payable annually $8,400,000 15-year, 12% note, dated December 31, 2004, interest payable annually $2,100,000 2. Interest revenue earned in 2017 $5,040 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2017
Maragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building: Principal Interest 12% bank loan 10,000,000 1,200,000 15% long-term loan 20,000,000 3,000,000 30,000,000 4,200,000 The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows:January 1 8,000,000June 30 8,000,000December 31 4,000,000 The capitalizable borrowing cost isa. 1,680,000b. 1,400,000c. 4,200,000d. 1,620,000 What is the solution for the option A?
Kobe Company began constructing a building for its own use in February 2017. During 2017, Kobe incurred interest of $70,000 on specific construction debt and $15,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2017 was $60,000. Required: What amount of interest should Kobe capitalize? Prepare the journal entry to record payment of the interest. If interest computed on the weighted-average amount of accumulated expenditures for the building during 2017 was instead $90,000, what amount of interest should Kobe capitalize?
On December 21, 2013, Jumble Inc. borrowed $1,000,000 at 10% payable annually to finance the construction of a new building. In 2014, the company made the following expenditures realated to this building. Jun-1 $400,000 July-1 $600,000 Sep-1 $1,200,000 Dec-1 $600,000 The building was completed in April 2015. Additional information is provided as follows: 1) other debt outstanding: 10-year, 8% bond dated December 31,2012, interest payable annually $10,000,000 15-year, 10% note, dated December 31, 2012, interest payable annually $2,500,000 2) Interest revenue earned in 2014 $6,000 INSTRUCTIONS: A) Determine the amount of interest to be capitalized in 2014 in relation to the construction of the building B) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2014
On December 31, 2024, Sunland Inc. borrowed $1,080,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: June 1, $432,000; July 1, $648,000; September 1, $1,296,000; December 1, $648,000. The building was completed in April 2026. Additional information is provided as follows: 1. 2 (a) Other debt outstanding 10-year, 11% bond, dated December 31, 2018, interest payable annually 15-year, 13% note, dated December 31, 2012, interest payable annually Interest revenue earned in 2025 (b) Your answer is correct. The amount of interest $ Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. (Round answer to O decimal places, e.g. 5,125.) eTextbook and Media List of Accounts ate Your answer is partially correct. 138,060 $10,800,000 $2,700,000 Account Titles and Explanation $6,480 Prepare the journal entry to record the capitalization of interest…
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On December 31, 2024, Splish Inc. borrowed $4,440,000 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, $532,800; June 1, $888,000; July 1, $2,220,000; December 1, $2,220,000. The building was completed in February 2026. Additional information is provided as follows. 1. Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually $5,920,000 6-year, 11% note, dated December 31, 2022, interest payable annually 2,368,000 2. March 1, 2025, expenditure included land costs of $222,000. 3. Interest revenue of $72,520 earned in 2025. (a) (b) Your answer is partially correct. 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 automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…
On December 31, 2024, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500,000; December 1, $1,500,000. The building was completed in February 2026. Additional information is provided as follows. 1. Other debt outstanding: 10-year, 13% bond, December 31, 2018, interest payable annually$4,000,000 2. 6-year, 10% note, dated December 31, 2022, interest payable annually1,600,000 3. March 1, 2025, expenditure included land costs of $150,000.Interest revenue of $49,000 earned in 2025. Instructions: Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2025.
On December 31, 2024, Crane Inc. borrowed $3,060,000 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, $367,200; June 1, $612,000; July 1, $1,530,000; December 1, $1,530,000. 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 $153,000. Interest revenue of $49,980 earned in 2025. Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. The amount of interest $ $4,080,000 1,632,000 ta
On December 31, 2024, Sunland Inc. borrowed $3,780,000 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, $453,600; June 1, $756,000; July 1, $1,890,000; December 1, $1,890,000. The building was completed in February 2026. Additional information is On December 31, 2024, Sunland Inc. borrowed $3,780,000 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, $453,600; June 1, $756,000; July 1, $1,890,000; December 1, $1,890,000. The building was completed in February 2026. Additional information is provided as follows. 1. Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually $5,040,000 6-year, 11% note, dated December 31, 2022, interest payable annually 2,016,000 2. March 1, 2025, expenditure included land costs of $189,000. 3. Interest revenue…
On December 31, 2019, Riverbed Inc. borrowed $3,660,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $439,200; June 1, $732,000; July 1, $1,830,000; December 1, $1,830,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $4,880,000 6-year, 11% note, dated December 31, 2017, interest payable annually $1,952,000 2. March 1, 2020, expenditure included land costs of $183,000 3. Interest revenue earned in 2020 $59,780 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…

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