Waterway Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,016,000 on March 1. $1.296,000 on June 1, and $3,052,090 on December 31. Waterway Company borrowed $1,137,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition. the company had outstanding all year a 10%, 5-year, $2,453,000 note payable and an 11%, 4-year, $3,176,000 note payable. Compute avoidable interest for Waterway Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted-average interest rate to 4 decimal places, eg. 0.2152 and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest 11.36
Waterway Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,016,000 on March 1. $1.296,000 on June 1, and $3,052,090 on December 31. Waterway Company borrowed $1,137,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition. the company had outstanding all year a 10%, 5-year, $2,453,000 note payable and an 11%, 4-year, $3,176,000 note payable. Compute avoidable interest for Waterway Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted-average interest rate to 4 decimal places, eg. 0.2152 and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest 11.36
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Waterway Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures
were $2,016,000 on March 1. $1,296,000 on June 1, and $3,052,090 on December 31.
Waterway Company borrowed $1,137,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition,
the company had outstanding all year a 10%, 5-year, $2,453,000 note payable and an 11%, 4-year, $3,176,000 note payable. Compute
avoidable interest for Waterway Company. Use the weighted-average interest rate for interest capitalization purposes. (Round
weighted-average interest rate to 4 decimal places, e.g. 0.2152 and final answer to 0 decimal places, e.g. 5,275.)
Avoidable interest $
11.36
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