On December 31, 2024, Crane
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42077dd4-5a93-4885-bc7c-dca1203ecd7a%2F097a0515-1655-4988-8517-30bc3f5011ad%2F6xa6bx_processed.png&w=3840&q=75)
Transcribed Image Text: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
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