Required:Calculate the amount of interest capitalized for 2024.E 10-24 Interest capitalization LO10-7On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building wascompleted in 2025. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to theconstruction loan, Highlands had the following debt outstanding throughout 2024:$5,000,000,$3,000,000,Construction expenditures incurred during 2024 were as follows:January 1March 31June 3012% bonds8% long-term noteSeptember 30December 31$ 600,0001,200,000800,000600,000400,000Required:Calculate the amount of interest capitalized for 2024 using the specific interest method.Page 554

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Required: Calculate the amount of interest capitalized for 2024 using the specific interest method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Required:
Calculate the amount of interest capitalized for 2024.
E 10-24 Interest capitalization LO10-7
On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was
completed in 2025. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the
construction loan, Highlands had the following debt outstanding throughout 2024:
$5,000,000,
$3,000,000,
Construction expenditures incurred during 2024 were as follows:
January 1
March 31
June 30
12% bonds
8% long-term note
September 30
December 31
$ 600,000
1,200,000
800,000
600,000
400,000
Required:
Calculate the amount of interest capitalized for 2024 using the specific interest method.
Page 554

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