On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3,300,000 construction loan with a 16% interest rate. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with interest rates of 10% and 12%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

What I need solved:
1. Please help me calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method.
2. Help me find the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,500,000 and $6,500,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

On January 1, 2021, the company obtained a $3 million loan with a 12% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,400,000 and $7,400,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,500,000 and $6,500,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

On January 1, 2021, the company obtained a $3 million loan with a 14% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,050,000

March 1, 2021 870,000

June 30, 2021 390,000

October 1, 2021 690,000

January 31, 2022 675,000

April 30, 2022 990,000

August 31, 2022 1,710,000

On January 1, 2021, the company obtained a $3 million construction loan with a 14% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,900,000 and $6,900,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

Prepare journal entries for the following transactions:

The following selected transactions relate to liabilities of Chicago Glass Corporation for 2018. Chicago's fiscal year ends on December 31.

1. On January 15, Chicago received $7,000 from Henry Construction toward the purchase of $66,000 of plate glass to be delivered on February 6.

2. On February 3, Chicago received $6,700 of refundable deposits relating to containers used to transport glass components,

3. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price.

4.First quarter credit sales totaled $700,000. The state sales tax rate is 4% and the local sales tax rate is 2%.

5. On March 3rd, the $6700 deposit was refunded. However, $1000 deposit was forfeited with the cost of containers at $800.

6. On November 1, 2018, Chicago issued a $216,000, 9-month, noninterest-bearing note to borrow money from Bank B. The implied discount rate is 10% . Prepare journal entry to record the issuance of the note.

7. Prepare the appropriate journal entry on December 31of this year to record accrued interest on the note.

Only need help with 5-7

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,500,000 and $6,500,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

On January 1, 2021, the company obtained a $3 million loan with a 12% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,100,000 and $6,100,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

You are the CFO of a sizable publicly-traded, multinational firm. Over the last 20 months, you've been working tirelessly to put together a deal for the construction of a very large manufacturing plant in Tokyo, Janapan. It's been quite a journey. You've spent weeks on end in Japan working with government representatives, architects, engineers and local contractors to get the project ready to go.  

Back here in ohio, you've also worked out the details on a $140,000,000 syndicated debt facility led by JP Morgan and they're ready to go with a construction loan. That, and another $70,000,000 of the Company's cash reserves will fund the project's total cost.

This morning, as usual, you're at your desk when the CEO walks down the hall by your office with what looks to you to be a distracted look on her face. She stops, looks at you and says: "This escalating tension between us and China over the Covid-19 pandemic. . .Should that impact our strategy to move forward on the project? Let's plan on having lunch in my office so you can tell me what you think."

Well, there goes the morning! What do you tell the CEO at lunch time?

1. You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The mover’s basic price is $65,000, and it will cost another $14,000 to modify it for special use by Ellis Construction. Assume that the earthmover falls into the MACRS 3-year class. (See Table 10A.2 at the end of Chapter 10 for MACRS recovery allowance percentages.) It will be sold after three years for $26,000, and it will require an increase in net working capital (spare parts inventory) of $2,900. The earthmover purchase will have no effect on revenues, but it is expected to save Ellis $27,500 per year in before-tax operating costs, mainly labor. Ellis’s marginal tax rate is 35 percent. A) What is the company’s net initial investment outlay if it acquires the earthmover? (That is, what is the Year 0 net cash flow?) B). What are the incremental operating cash flows in Years 1, 2, and 3? C). What is the terminal cash flow in Year 3? D). If the project’s required rate of return is 10 percent, should the earthmover be purchased? Use NPV, IRR, and MIRR to answer this question. E). Calculate the traditional payback period and the discounted payback period for this project.