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In: Accounting

Villa Industries is constructing a building. Construction began on January 1 and was completed on December...

Villa Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6370000 on March 1, $5300000 on June 1, and $8250000 on December 31. Bonita Industries borrowed $3250000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6450000 note payable and an 11%, 4-year, $12250000 note payable.


What is the actual interest for Bonita Industries?

A.$2382500

B.

 $1984500
C.$938990
D.$2418250

Solutions

Expert Solution

ANS A 2,382,500

Computation of the Actual Interest
Loan Amount Interest Interest amount
$                                                                                             3,250,000 0.12 $ 390,000
$                                                                                             6,450,000 0.10 $ 645,000
$                                                                                           12,250,000 0.11 $        1,345,500
Total Actual Interest Amount $        2,382,500

ekkarill92 answered 1 year ago
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