Problem 5-18 (AA) On June 1, 202O, Circus Company began construction o new manufacturing plant. The plant was completed October 31, 2021. Expenditures on the project were: 5,000,000 3,000,000 3,000,000 2,000,000 2,000,000 500,000 on 1, 2020 October 1, 2020 February 1, 2021 1, 2021 July April September1, 2021 October 1, 2021 On July 1, 2020, the entity obtained a P7,000.000 construction loan with a 6% interest rate. The loan was outstanding through the end of October 2021. The only other interest-bearing debt was a long-term nete for P15,000,000 with an interest rate of 8%. This note was outstanding during 2020 and 2021. The fiscal year-end is December 31. 1. What amount of interest should be capitalized in 2020? a 210,000 b. 195.000 c. 390,000 d. 420,000 2. What ampunt of interest should be capitalized in 2021? a 1.000.000 b. 1,350,000 700.000 d. 733,000 3. What is the interest.expense for 20217 a 1.200,000 c. 887.000

Problem 5-18 (AA) On June 1, 202O, Circus Company began construction o new manufacturing plant. The plant was completed October 31, 2021. Expenditures on the project were: 5,000,000 3,000,000 3,000,000 2,000,000 2,000,000 500,000 on 1, 2020 October 1, 2020 February 1, 2021 1, 2021 July April September1, 2021 October 1, 2021 On July 1, 2020, the entity obtained a P7,000.000 construction loan with a 6% interest rate. The loan was outstanding through the end of October 2021. The only other interest-bearing debt was a long-term nete for P15,000,000 with an interest rate of 8%. This note was outstanding during 2020 and 2021. The fiscal year-end is December 31. 1. What amount of interest should be capitalized in 2020? a 210,000 b. 195.000 c. 390,000 d. 420,000 2. What ampunt of interest should be capitalized in 2021? a 1.000.000 b. 1,350,000 700.000 d. 733,000 3. What is the interest.expense for 20217 a 1.200,000 c. 887.000

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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