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On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,800,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 12% bonds. $6,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 11 March 311 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date $ 780,000 1,300,000 1,016,000 780,000 580,000 January 11 March 31 June 30 September 30 December 31. Accumulated expenditure Expenditure S Average accumulated expenditures $ Amount 0 0 X X X Weight Interest Rate % . Average S Capitalized Interest $ 0

On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,800,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 12% bonds. $6,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 11 March 311 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date $ 780,000 1,300,000 1,016,000 780,000 580,000 January 11 March 31 June 30 September 30 December 31. Accumulated expenditure Expenditure S Average accumulated expenditures $ Amount 0 0 X X X Weight Interest Rate % . Average S Capitalized Interest $ 0

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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On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,800,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 12% bonds $6,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 11 March 31- June 30 September 30 December 31 January 1 March 31 June 30 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date $ 780,000 1,380,000 1,016,000 September 30 December 31 Accumulated expenditure 780,000 580,000 Expenditure $ Average accumulated expenditures $ Amount 0 0 X X X X X x Weight Interest Rate % . M . $ Average Capitalized Interest $ 0
Transcribed Image Text:On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,800,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 12% bonds $6,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 11 March 31- June 30 September 30 December 31 January 1 March 31 June 30 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date $ 780,000 1,380,000 1,016,000 September 30 December 31 Accumulated expenditure 780,000 580,000 Expenditure $ Average accumulated expenditures $ Amount 0 0 X X X X X x Weight Interest Rate % . M . $ Average Capitalized Interest $ 0
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