On December 31, 2009, Hurston Inc. borrowed $1,000,000 at 12% payable annually to finance the construction...

On December 31, 2009, Hurston Inc. borrowed $1,000,000 at 12% payable annually to finance the construction of a new building. In 2010, the company made the following expenditures related to this building: March 1^st, $360,000; July 1^st, $1,600,000; December 1^st, $1,200,000. Additional information is provided as follows.

	Other debt outstanding
	10-year, 12% bond, December 31, 2003, interest payable annually	$2,000,000
	6-year, 10% note, dated December 31, 2007, interest payable annually	$4,000,000

What is the weighted average accumulated expenditure?

What is the avoidable interest?

All interest are paid in cash on December 31^st. Prepare the journal entry to record cash payment of interest, the capitalization of interest and the recognition of interest expense, if any, at December 31, 2010.

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ekkarill92 answered 2 years ago

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