Amount of interest to be capitalized in current year. Given Information: Cost of plant is $8,500,000. Accumulated expenditures are $4,250,000. Amount of note payable used to finance the plant is $2,000,000. Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%. Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

Question

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Answer 1

Question

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

b.

To determine

The amount of interest to be expensed in current year.

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

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Answer 2

Question

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

b.

To determine

The amount of interest to be expensed in current year.

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

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Answer 3

Question

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

b.

To determine

The amount of interest to be expensed in current year.

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

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Answer 4

Question

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

b.

To determine

The amount of interest to be expensed in current year.

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

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Answer 5

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

b.

To determine

The amount of interest to be expensed in current year.

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

Answer 6

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

Answer 7

Chapter 11, Problem 11.6E

a.

To determine

Amount of interest to be capitalized in current year.

Given Information:

Cost of plant is $8,500,000.

Accumulated expenditures are $4,250,000.

Amount of note payable used to finance the plant is $2,000,000.

Bond used to finance local transmitters amounted $1,800,000 and carried interest at 12%.

Note payable used to finance the construction of corporate headquarters amounted $4,200,000 and carried interest at 13%.

Answer 8

b.

To determine

The amount of interest to be expensed in current year.

Answer 9

b.

To determine

The amount of interest to be expensed in current year.

Answer 10

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

Answer 11

c.

To determine

To prepare: Journal entry to record the cash interest payments in current year.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9Q Ch. 11 - Prob. 11.10Q

Solution Summary: The author explains the amount of interest to be capitalized in current year. The weighted average interest is calculated by the proportion of total interest in total principle.

The amount of interest to be expensed in current year.

To prepare: Journal entry to record the cash interest payments in current year.

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Chapter 11 Solutions