Windsor Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,884,000 on March 1, $1,284,000 on June 1, and $3,091,000 on December 31. Windsor Company borrowed $1,174,000 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, $2,380,000 note payable and an 11%, 4-year, $3,616,000 note payable. Compute avoidable interest for Windsor 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 O decimal places, eg. 5,275.) Avoidable interest 2317000
Windsor Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,884,000 on March 1, $1,284,000 on June 1, and $3,091,000 on December 31. Windsor Company borrowed $1,174,000 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, $2,380,000 note payable and an 11%, 4-year, $3,616,000 note payable. Compute avoidable interest for Windsor 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 O decimal places, eg. 5,275.) Avoidable interest 2317000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Windsor Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures
were $1,884,000 on March 1, $1,284,000 on June 1, and $3,091,000 on December 31.
Windsor Company borrowed $1,174,000 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, $2,380,000 note payable and an 11%, 4-year, $3,616,000 note payable. Compute
avoidable interest for Windsor 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 O decimal places, eg. 5,275.)
Avoidable interest
$
2317000
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