The company borrowed $762,000 on a construction loan at 12% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,560,000 in 12% bonds payable outstanding in 2024 and 2025.
The company borrowed $762,000 on a construction loan at 12% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,560,000 in 12% bonds payable outstanding in 2024 and 2025.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows:
| January 1, 2024 | $ 248,000 |
|---|---|
| September 1, 2024 | $ 336,000 |
| December 31, 2024 | $ 336,000 |
| March 31, 2025 | $ 336,000 |
| September 30, 2025 | $ 248,000 |
The company borrowed $762,000 on a construction loan at 12% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,560,000 in 12% bonds payable outstanding in 2024 and 2025.
Interest (using the specific interest method) capitalized for 2025 was:
Multiple Choice
$106,848.
$124,668.
$68,580.
$107,918.
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