Required 1 Required 2How much interest expense will San Antonio report in its 2021 income statement? (Do not round intermediate calculations.Round your final answer to the nearest whole dollar.)Interest expense Early In Its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand operations. The first stage wascompleted on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchasedby paying $200,000 Immediately and signing a noninterest-bearing note requiring the company to pay $600,000 on March 28, 2023.An Interest rate of 8% properly reflects the time value of money for this type of loan agreement. Title search, Insurance, and otherclosing costs totaling $20,000 were paid at closing.At the end of April, the old building was demolished at a cost of $70,000, and an additional $50,000 was paid to clear and grade theland. Construction of a new building began on May 1 and was completed on October 29. Construction expenditures were as follows:(FV of $1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)May 1July 30September 1October 1San Antonio borrowed $3,000,000 at 8% on May 1 to help finance construction. This loan, plus interest, will be paid in 2022. Thecompany also had a $5,250,000, 8% long-term note payable outstanding throughout 2021.$1,200,0001,500,000900,0001,800,000In November, the company purchased 10 identical pieces of equipment and office furniture and fixtures for a lump-sum price of$600,000. The fair values of the equipment and the furniture and fixtures were $455,000 and $245,000, respectively. In December,San Antonio paid a contractor $285,000 for the construction of parking lots and for landscaping.Required:1. Determine the initial values of the various assets that San Antonio acquired or constructed during 2021. The company uses thespecific Interest method to determine the amount of Interest capitalized on the building construction. (Hint: Expenditures on March28 and April 30 to acquire land on which to construct the building are included as part of accumulated expenditures for determiningthe amount of Interest capitalized on the building. This means the Interest capitalization period begins on March 28.)2. How much Interest expense will San Antonio report in Its 2021 Income statement?Complete this question by entering your answers in the tabs below.Required 1Determine the initial values of the various assets that San Antonio acquired or constructed during 2021. The company usesthe specific interest method to determine the amount of interest capitalized on the building construction. (Hint: Expenditureson March 28 and April 30 to acquire land on which to construct the building are included as part of accumulated expendituresfor determining the amount of interest capitalized on the building. This means the interest capitalization period begins onMarch 28.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)AssetsRequired 2LandLand improvementsBuildingEquipmentFurniture & fixturesInitial ValueS 854,403S 285,000S 390,000$ 210,000Show less

Assets are resources owned by business. It is of two types tangible assets and intangible assets.…

Required 1 Required 2 How much interest expense will San Antonio report in its 2021 income statement? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Interest expense

Required 1 Required 2 How much interest expense will San Antonio report in its 2021 income statement? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Interest expense

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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