On December 31, 2024, Windsor Inc. borrowed $3,480,000 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, $417,600; June 1, $696,000; July 1, $1,740,000: December 1, $1,740,000. The building was completed in February 2026. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding: 10-year, 13 % bond, December 31, 2018, interest payable annually 6-year, 10% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $174,000. Interest revenue of $56,840 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 s $4,640,000 1,856,000 212280

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 account titles and enter O for the amounts. List all debit entries before credit entries.)
te
31, 2025
Account Titles and Explanation
Buildings
Interest Expense
Cash
Debit
212280
Credit
Transcribed Image Text: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 account titles and enter O for the amounts. List all debit entries before credit entries.) te 31, 2025 Account Titles and Explanation Buildings Interest Expense Cash Debit 212280 Credit
On December 31, 2024, Windsor Inc. borrowed $3,480,000 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, $417,600; June 1, $696,000; July 1,
$1,740,000; December 1, $1,740,000. The building was completed in February 2026. Additional information is provided as follows.
1.
2.
3.
(a)
Other debt outstanding:
10-year, 13% bond, December 31, 2018, interest payable annually
6-year, 10% note, dated December 31, 2022, interest payable annually
March 1, 2025, expenditure included land costs of $174,000.
Interest revenue of $56,840 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 $
$4,640,000
1,856,000
212280
Transcribed Image Text:On December 31, 2024, Windsor Inc. borrowed $3,480,000 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, $417,600; June 1, $696,000; July 1, $1,740,000; December 1, $1,740,000. The building was completed in February 2026. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding: 10-year, 13% bond, December 31, 2018, interest payable annually 6-year, 10% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $174,000. Interest revenue of $56,840 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 $ $4,640,000 1,856,000 212280
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