Pronghorn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,160,000 on March 1, $1,440,000 on June 1, and $3,600,000 on December 31. Pronghorn Company borrowed $1.200,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $2,400,000 note payable and an 11%, 4-year. $4,200,000 note payable. Compute avoidable interest for Pronghorn Company. Use the weighted average interest rate for interest capitalization purposes. (Round "Weighted average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, eg. 5,275) Avoidable interest $
Pronghorn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,160,000 on March 1, $1,440,000 on June 1, and $3,600,000 on December 31. Pronghorn Company borrowed $1.200,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $2,400,000 note payable and an 11%, 4-year. $4,200,000 note payable. Compute avoidable interest for Pronghorn Company. Use the weighted average interest rate for interest capitalization purposes. (Round "Weighted average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, eg. 5,275) Avoidable interest $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pronghorn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures
were $2,160,000 on March 1, $1,440,000 on June 1, and $3,600,000 on December 31.
Pronghorn Company borrowed $1,200,000 on March 1 on a 5-year. 10 % note to help finance construction of the building. In addition,
the company had outstanding all year a 12%, 5-year, $2,400,000 note payable and an 11%, 4-year, $4,200,000 note payable. Compute
avoidable interest for Pronghorn Company. Use the weighted-average interest rate for interest capitalization purposes. (Round
"Weighted average interest rate" to 4 decimal places, eg. 0.2152 and final answer to 0 decimal places, eg. 5,275)
Avoidable interest
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