Pronghorn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,932,000 on March 1, $1,212,000 on June 1, and $3,037,690 on December 31. Pronghorn Company borrowed $1,168,790 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,022,900 note payable and an 10%, 4-year, $3,737,800 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate %

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
Question

Rahul

Pronghorn Company is constructing a building. Construction began on February 1 and
was completed on December 31. Expenditures were $1,932,000 on March 1,
$1,212,000 on June 1, and $3,037,690 on December 31.
Pronghorn Company borrowed $1,168,790 on March 1 on a 5-year, 12% note to help
finance construction of the building. In addition, the company had outstanding all year
a 9%, 5-year, $2,022,900 note payable and an 10%, 4-year, $3,737,800 note payable.
Compute the weighted-average interest rate used for interest capitalization purposes.
(Round answer to 2 decimal places, e.g. 7.58%.)
Weighted-average interest rate
%
Transcribed Image Text:Pronghorn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,932,000 on March 1, $1,212,000 on June 1, and $3,037,690 on December 31. Pronghorn Company borrowed $1,168,790 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,022,900 note payable and an 10%, 4-year, $3,737,800 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate %
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