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On December 31, 2024, Sheffield Inc. borrowed $4.020,000 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, $482,400, June 1, $804,000: July 1. $2.010,000, December 1, $2.010,000. The building was completed in February 2026. Additional information is provided as follows 1 2 3. 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 $201.000. Interest revenue of $65.660 earned in 2025. $5,360,000 2.144,000

On December 31, 2024, Sheffield Inc. borrowed $4.020,000 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, $482,400, June 1, $804,000: July 1. $2.010,000, December 1, $2.010,000. The building was completed in February 2026. Additional information is provided as follows 1 2 3. 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 $201.000. Interest revenue of $65.660 earned in 2025. $5,360,000 2.144,000

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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Ee 163.

On December 31, 2024, Sheffield Inc. borrowed $4,020,000 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, $482,400, June 1, $804,000: July 1. $2.010,000, December 1, $2.010,000. 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 $201.000. Interest revenue of $65.660 earned in 2025. Your answer is correct, (b) 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 List of Accounts Date December 31, 2025 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 account titles and enter O for the amounts. List all debit entries before credit entries Account Titles and Explanation eTextbook and Media List of Accounts $5,360,000 2.144,000 265.655 Saw for Later Attempts: 1 of 3 used Debit Credit Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:On December 31, 2024, Sheffield Inc. borrowed $4,020,000 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, $482,400, June 1, $804,000: July 1. $2.010,000, December 1, $2.010,000. 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 $201.000. Interest revenue of $65.660 earned in 2025. Your answer is correct, (b) 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 List of Accounts Date December 31, 2025 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 account titles and enter O for the amounts. List all debit entries before credit entries Account Titles and Explanation eTextbook and Media List of Accounts $5,360,000 2.144,000 265.655 Saw for Later Attempts: 1 of 3 used Debit Credit Attempts: 0 of 3 used Submit Answer
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