On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:                                 $5,000,000, 12% bonds                                $3,000,000, 8% long-term note Construction expenditures incurred during 2021 were as follows:January 1                 $ 600,000March 31                 1,200,000June 30                      800,000September 30           600,000December 31            400,000Required:Calculate the amount of interest capitalized for 2021 using the specific interest method.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:

                                $5,000,000, 12% bonds
                                $3,000,000, 8% long-term note

Construction expenditures incurred during 2021 were as follows:
January 1                 $ 600,000
March 31                 1,200,000
June 30                      800,000
September 30           600,000
December 31            400,000
Required:
Calculate the amount of interest capitalized for 2021 using the specific interest method.

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