Kk.371. On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. Thebuilding was completed on September 30, 2025. Expenditures on the project were as follows:January 1, 2024March 1, 2024June 30, 2024October 1, 2024January 31, 2025April 30, 2025August 31, 2025On January 1, 2024, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is notspecifically tied to construction of the building. The loan was outstanding all of 2024 and 2025. The company's other interest-bearingdebt included two long-term notes of $5,600,000 and $7,600,000 with interest rates of 8% and 10%, respectively. Both notes wereoutstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31.$ 1,230,000720,000380,000670,000990,0001,305,0002,340,000Required:Using the weighted-average interest method, answer the following questions:1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method.2. What is the total cost of the building?3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.Complete this question by entering your answers in the tabs below.Req 1 and 3Req 21. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method.3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.Note: Round "Weighted-average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Enteryour answers in dollars rounded to the nearest whole number.20242025Prev5 of 7Next >Show less A

Debt typeAmount ($)Interest rateInterest amount…

Required: Using the weighted-average interest method, answer the following questions: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.

Required: Using the weighted-average interest method, answer the following questions: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.

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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