On July 31, 2025, Sheridan Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery.Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Sheridan issued a$296,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $190,400 of theproceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketablesecurities (trading securities) at 10% until November 1. On November 1, Sheridan made a final $106,000 payment to Minsk. Otherthan the note to Netherlands, Sheridan's only outstanding liability at December 31, 2025, is a $31,800, 8%, 6-year note payable, datedJanuary 1, 2022, on which interest is payable each December 31.(a)Your answer is correct.Calculate weighted average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025.Weighted-average accumulated expenditures $Avoidable interestInterest capitalizedSA$4760057125712 Prepare the journal entries needed on the books of Sheridan Company at each of the following dates. (Record journal entries in theorder presented in the problem. Credilt account titles are automatically indented when amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries)1.23.July 31, 2025.November 1, 2025.December 31, 2025.DateAccount Titles and Explanation(To record the note.)(To record the payment to Minsk.)DebitCredit

Working : Weighted average accumulated expenditures : Amount paid x period

Answered: On July 31, 2025, Sheridan Company…

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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Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. 2. Record the adjustments on December 31, 2021, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) Journal entry worksheet Record the adjusting entry for interest for Precision Castparts. Record the adjusting entry for interest for Midwest Bank. Note: Enter debits before credits. Date General…
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