The following information is from Bowin Inc. for a long-term constructioproject that is expected to be completed in January 2021. Theconstruction project is for a building intended for the company's ownuse. Bowin Inc. borrowed $800,000 at 12% on January 1 to helpfinance the construction. All debt was outstanding for the full year.Capital Expenditures for 2020DateJan. 1, 2020Mar. 1, 2020June 30, 2020Dec. 31, 2020Amount$2,220,720300,000500,000500,000Outstanding Debt in 2020AssetDebtNote payableNote payableBond payableNote payableConstruction loanDebt Amount Interest Rate$1,000,000600,000150,000600,000800,00013%8%10%12%12%The weighted-average accumulated expenditures in 2020 is $

Weighted-average accumulated expenditures is used to determine the weighted average of expenditures…

The following information is from Bowin Inc. for a long-term construct project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. Bowin Inc. borrowed $800,000 at 12% on January 1 to help finance the construction. All debt was outstanding for the full year.

The following information is from Bowin Inc. for a long-term construct project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. Bowin Inc. borrowed $800,000 at 12% on January 1 to help finance the construction. All debt was outstanding for the full year.

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, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 11% Long-term note, 10% Long-term note, 7% Required: Calculate the amount of interest capitalized in 2024 for the building using the specific interest method. Interest capitalized $ 1,500,000 2,000,000 4,000,000 $ 255,000
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