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On June 1, 2025, Bonita contracted with Black Construction to have a new building constructed for $4,720,000 on land owned by Bonita. The payments made by Bonita to Black Construction are shown in the schedule below. Date July 30, 2025 January 30, 2026 May 30, 2026 Total payments Amount Construction was completed and the building was ready for occupancy on May 27, 2026. Bonita had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year. (a) $1,062,000 1,770,000 1,888,000 $4,720,000 10%, 5-year note payable of $2,360,000, dated April 1, 2022, with interest payable annually on April 1. 12%, 10-year bond issue of $3,540,000 sold at par on June 30, 2018, with interest payable annually on June 30. The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. Compute the weighted-average accumulated expenditures on Bonita's new building during the capitalization period. Save for Later Weighted-average accumulated expenditures $ Attempts: 0 of 3 used Submit Answer

On June 1, 2025, Bonita contracted with Black Construction to have a new building constructed for $4,720,000 on land owned by Bonita. The payments made by Bonita to Black Construction are shown in the schedule below. Date July 30, 2025 January 30, 2026 May 30, 2026 Total payments Amount Construction was completed and the building was ready for occupancy on May 27, 2026. Bonita had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year. (a) $1,062,000 1,770,000 1,888,000 $4,720,000 10%, 5-year note payable of $2,360,000, dated April 1, 2022, with interest payable annually on April 1. 12%, 10-year bond issue of $3,540,000 sold at par on June 30, 2018, with interest payable annually on June 30. The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. Compute the weighted-average accumulated expenditures on Bonita's new building during the capitalization period. Save for Later Weighted-average accumulated expenditures $ Attempts: 0 of 3 used Submit Answer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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DVDs in addition to books. On June 1, 2025, Bonita contracted with Black Construction to have a new building constructed for $4,720,000 on land owned by Bonita. The payments made by Bonita to Black Construction are shown in the schedule below. Date July 30, 2025 January 30, 2026 May 30, 2026 Total payments Amount (a) $1,062,000 1,770,000 1,888,000 Construction was completed and the building was ready for occupancy on May 27, 2026. Bonita had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year. $4,720,000 10%, 5-year note payable of $2,360,000, dated April 1, 2022, with interest payable annually on April 1. 12%, 10-year bond issue of $3,540,000 sold at par on June 30, 2018, with interest payable annually on June 30. The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. Save for Later Compute the weighted-average accumulated expenditures on Bonita's new building during the capitalization period. Weighted-average accumulated expenditures Attempts: 0 of 3 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
Transcribed Image Text:DVDs in addition to books. On June 1, 2025, Bonita contracted with Black Construction to have a new building constructed for $4,720,000 on land owned by Bonita. The payments made by Bonita to Black Construction are shown in the schedule below. Date July 30, 2025 January 30, 2026 May 30, 2026 Total payments Amount (a) $1,062,000 1,770,000 1,888,000 Construction was completed and the building was ready for occupancy on May 27, 2026. Bonita had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year. $4,720,000 10%, 5-year note payable of $2,360,000, dated April 1, 2022, with interest payable annually on April 1. 12%, 10-year bond issue of $3,540,000 sold at par on June 30, 2018, with interest payable annually on June 30. The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. Save for Later Compute the weighted-average accumulated expenditures on Bonita's new building during the capitalization period. Weighted-average accumulated expenditures Attempts: 0 of 3 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
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