On June 1, 2022, Sun Construction began construction of a new building for its use. The building was finished and ready for use on May 31, 2024. Expenditures for the construction were as follows: Cost of land paid in June 1, 2022 $1,800,000 September 1/2022 600,000 December 31, 2022 800,000 march 31, 2023 395,000 May 31,2023 375,000 November 1,2023 562,500 January 31,2024 37,806 May31, 2024 567983 Sun Construction borrowed $700,000 on a construction loan at 5% interest on June 1,2022 This loan was outstanding during the construction period. The company also had the following outstanding loan during the period: $7,000,000, 7. % bonds $5,000,000, 4% mortgage. Required 1-Compute the amount of capitalize interest, if any from first day of the project until its ready to use? 2-Journalize the entries in May 31/2024 and calculate the building total cost. 3- Journalize the depreciation in 31/12/2024 assuming the company use straight line method for depreciation with 50 years' useful life and no salvage value
On June 1, 2022, Sun Construction began construction of a new building for its use. The building was finished and ready for use on May 31, 2024. Expenditures for the construction were as follows: Cost of land paid in June 1, 2022 $1,800,000 September 1/2022 600,000 December 31, 2022 800,000 march 31, 2023 395,000 May 31,2023 375,000 November 1,2023 562,500 January 31,2024 37,806 May31, 2024 567983 Sun Construction borrowed $700,000 on a construction loan at 5% interest on June 1,2022 This loan was outstanding during the construction period. The company also had the following outstanding loan during the period: $7,000,000, 7. % bonds $5,000,000, 4% mortgage. Required 1-Compute the amount of capitalize interest, if any from first day of the project until its ready to use? 2-Journalize the entries in May 31/2024 and calculate the building total cost. 3- Journalize the depreciation in 31/12/2024 assuming the company use straight line method for depreciation with 50 years' useful life and no salvage value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On June 1, 2022, Sun Construction began construction of a new building for its use. The
building was finished and ready for use on May 31, 2024. Expenditures for the construction
were as follows:
Cost of land paid in June 1, 2022
$1,800,000
September 1/2022
600,000
December 31, 2022
800,000
march 31, 2023
395,000
May 31,2023
375,000
November 1,2023
562,500
January 31,2024
37,806
May 31, 2024
567983
Sun Construction borrowed $700,000 on a construction loan at 5% interest on June 1,2022
This loan was outstanding during the construction period. The company also had the
following outstanding loan during the period:
$7,000,000, 7. % bonds
$5,000,000, 4% mortgage.
Required
1-Compute the amount of capitalize interest, if any from first day of the project until its ready to use?
2-Journalize the entries in May 31/2024 and calculate the building total cost.
3- Journalize the depreciation in 31/12/2024 assuming the company use straight line method for
depreciation with 50 years' useful life and no salvage value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f14e8cc-a365-4021-a249-a957c01a8a0b%2Fdc66ebe2-299a-4a06-a3e4-bc84ffd0fcb7%2F5088ecc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On June 1, 2022, Sun Construction began construction of a new building for its use. The
building was finished and ready for use on May 31, 2024. Expenditures for the construction
were as follows:
Cost of land paid in June 1, 2022
$1,800,000
September 1/2022
600,000
December 31, 2022
800,000
march 31, 2023
395,000
May 31,2023
375,000
November 1,2023
562,500
January 31,2024
37,806
May 31, 2024
567983
Sun Construction borrowed $700,000 on a construction loan at 5% interest on June 1,2022
This loan was outstanding during the construction period. The company also had the
following outstanding loan during the period:
$7,000,000, 7. % bonds
$5,000,000, 4% mortgage.
Required
1-Compute the amount of capitalize interest, if any from first day of the project until its ready to use?
2-Journalize the entries in May 31/2024 and calculate the building total cost.
3- Journalize the depreciation in 31/12/2024 assuming the company use straight line method for
depreciation with 50 years' useful life and no salvage value
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