On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows:January 2, 2020$ 609000September 1, 20201802400December 31, 20201802400March 31, 20211802400September 30, 20211203000Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.The interest capitalized for 2020 was:A)$505656B)$108882C)$145176D)$289368

Interest to be capitalized in 2020 = $145176

Answered: On January 2, 2020, Bonita Industries…

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 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows:

January 2, 2020	$ 609000
September 1, 2020	1802400
December 31, 2020	1802400
March 31, 2021	1802400
September 30, 2021	1203000

Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.

The interest capitalized for 2020 was:

A)$505656

B)$108882

C)$145176

D)$289368

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