On January 1, 2016, the Highlands Company began construction on a new manufacturing facility for its own use.The building was completed in 2017. The company borrowed $1,500,000 at 8% on January 1 to help finance theconstruction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2016:$5,000,000, 12% bonds$3,000,000, 8% long-term noteConstruction expenditures incurred during 2016 were as follows:January 1March 31$ 600,0001,200,000800,000600,000400,000June 30September 30December 31Required:Calculate the amount of interest capitalized for 2016 using the specific interest method.

Interest Capitalization:Interest capitalization refers to the interest amount that is added to the…

Answered: On January 1, 2016, the Highlands…

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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The following information is from Bowin Inc. for a long-term constructio project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. Bowin Inc. borrowed $800,000 at 12% on January 1 to help finance the construction. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Jan. 1, 2020 Mar. 1, 2020 June 30, 2020 Dec. 31, 2020 Amount $2,220,720 300,000 500,000 500,000 Outstanding Debt in 2020 Asset Debt Note payable Note payable Bond payable Note payable Construction loan Debt Amount Interest Rate $1,000,000 600,000 150,000 600,000 800,000 13% 8% 10% 12% 12% The weighted-average accumulated expenditures in 2020 is $
Compute the depreciation expense for the year ended December 31, 2026. Sheridan elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $360,000. (Round answer to O decimal places, e.g. 5,275.) Depreciation expense $ 360000
2. On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new building. In 2021 the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500,000; Dec 1, $1,500,000. The building was completed on April 30, 2022 Other debt outstanding 10 year, $4,000,000, 13% bond, December 31, 2014, interest payable annually 6 year, 10%, $1,600,000 note dated December 31,2018, interest payable March 1, 2021 an additional expenditure was made towards construction of $150,000 Interest revenue earned in 2021 $49,000 What is the weighted average interest rate of debt other than the specific borrowing loan? (Round of interest rate to nearest whole number, so if you calculated .1412 you would write 14) The firm does not need to use the WAIR rate in calculating capitalized interest in order for it to exist Thank you Brenda
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