Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $2,000,000, 8% note $8,000,000, 4% bonds Construction expenditures incurred were as follows: July 1, 2016 September 30, 2016 November 30, 2016 January 30, 2017 $400,000 600,000 600,000 540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2016 and 2017.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31,
2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing
liabilities that were outstanding throughout the construction period:
$2,000,000, 8% note
$8,000,000, 4% bonds
Construction expenditures incurred were as follows:
July 1, 2016
September 30, 2016
November 30, 2016
January 30, 2017
$400,000
600,000
600,000
540,000
The company's fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2016 and 2017.
Transcribed Image Text:Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $2,000,000, 8% note $8,000,000, 4% bonds Construction expenditures incurred were as follows: July 1, 2016 September 30, 2016 November 30, 2016 January 30, 2017 $400,000 600,000 600,000 540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2016 and 2017.
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