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 %
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 %
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
Question
Rahul

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
%
AI-Generated Solution
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College

Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College