Question
In: Accounting
During 2020, GR Engineering Company constructed a building for its own use at a total cost...
During 2020, GR Engineering Company constructed a building for its own use at a total cost of $14,700,000.
The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,200,000. The company had the following debt outstanding at December 31, 2020: 1. 10%, 5-year note to finance construction of this building, dated January 1, 2020, with interest payable annually on January 1 $6,300,000 2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 7,000,000 3. 9%, 4-year note payable, dated January 1, 2019, with interest payable annually on January 1 3,500,000 Compute the amounts of each of the following (show computations). 1. Avoidable interest 2. Actual interest 3. Total interest to be capitalized during 2020
Solutions
ekkarill92 answered 6 months agoRelated Solutions
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10%, 5-year note to finance construction of various assets,
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During 2020, Barden Building Company constructed various assets
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outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of
various assets,
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$6,300,000
2. 12%, ten-year bonds issued at par on December 31,
2014, with interest
payable annually...
During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The weighted...
During 2020, Barden Building Company constructed various assets
at a total cost of $14,700,000. The weighted average accumulated
expenditures on assets qualifying for capitalization of interest
during 2020 were $9,800,000. The company had the following debt
outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of
various assets,
dated January 1, 2020, with
interest payable annually on January
1 $6,300,000
2. 12%, ten-year bonds issued at par on December 31,
2014, with interest
payable annually...
During 2017, Barden Building Company constructed own equipment at a total cost of $16,650,000. Date Capitalization...
During 2017, Barden Building Company constructed own equipment
at a total cost of $16,650,000.
Date
Capitalization Expenditure
Period
The weighted average accumulated
expenditures
1-Apr
$5,000,000
1-Jun
$7,000,000
31-Aug
$3,650,000
31-Dec
$1,000,000
Total
$16,650,000
The company had the following debt outstanding at December 31,
2017:
1. 10%, 5-year note to finance construction of
various assets,
dated April 1,
2017, with interest payable annually on January
1
$6,300,000
2. 13.5%, ten-year bonds issued at par on December
31, 2011, with interest...
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interest during 2018 were $7,000,000. The company had the following
debt outstanding at December 31, 2018: • 10%, 5-year note to
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interest payable annually on January 1 $4,500,000 • 12%,
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principal payable on January...
Vania Magazines started construction of a warehouse building for its own use at an estimated cost...
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construction period, Vania has the following debt obligations
outstanding.
Construction loan—12% interest, payable semiannually, issued
December 31, 2018
$2,000,000
Short-term loan—10% interest, payable monthly, and principal
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1) What entry should be made...
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