On January 2, 2025, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished andready for use on September 30, 2026. Expenditures for the construction were as follows:January 2, 2025September 1, 2025December 31, 2025March 31, 2026September 30, 2026$ 60000018000001800000O $391500O $270000O $94500O $29700018000001200000Indian River Groves borrowed $3300000 on a construction loan at 12% interest on January 2, 2025. This loan was outstanding duringthe construction period. The company also had $12000000 in 9% bonds outstanding in 2025 and 2026.The interest capitalized for 2026 was:

Capitalized Interest -The amount borrowed to acquire a long-term asset is called capitalized…

River ady for use on September 30, 2026. Expenditures for the construction were as follows: anuary 2, 2025 eptember 1, 2025 December 31, 2025 $600000 1800000 1800000 March 31, 2026 eptember 30, 2026 1200000 1800000 citrus processing plant. The automated plant was fin dian River Groves borrowed $3300000 on a construction loan at 12% interest on January 2, 2025. This loan was outstan

River ady for use on September 30, 2026. Expenditures for the construction were as follows: anuary 2, 2025 eptember 1, 2025 December 31, 2025 $600000 1800000 1800000 March 31, 2026 eptember 30, 2026 1200000 1800000 citrus processing plant. The automated plant was fin dian River Groves borrowed $3300000 on a construction loan at 12% interest on January 2, 2025. This loan was outstan

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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On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,940,000 March 1, 2021 1,680,000 June 30, 2021 1,880,000 October 1, 2021 1,680,000 January 31, 2022 432,000 April 30, 2022 765,000 August 31, 2022 1,062,000 On January 1, 2021, the company obtained a $4,800,000 construction loan with a 14% interest rate. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $3,000,000 and $7,000,000 with interest rates of 6% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific…
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On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $4,400,000 and $6,400,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is December 31. $1,300,000 720,000 340,000 640,000 450,000 765,000 1,260,000 Required: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method. 2.…
On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025: August 31, 2025 On January 1, 2024, the company obtained a $4,300,000 construction loan with a 12% interest rate. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $3,000,000 and $7,000,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. $1,740,000 1,380,000 1,580,000 1,380,000 387,000 720,000 1,017,000 Required: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the specific interest method. 2. What is the total cost of the…
On December 31, 2024, Tamarisk Inc. borrowed $3,960,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $475,200; June 1, $792,000; July 1, $1,980,000; December 1, $1,980,000. The building was completed in February 2026. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $198,000. Interest revenue of $64,680 earned in 2025. Your answer is correct Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. The amount of interest $ eTextbook and Media Date Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2025. (Credit account titles are…