Capitalization of interest:
During 2014, Barden Building Company constructed various as...
Business, 25.04.2020 01:53 mallyosburn
Capitalization of interest:
During 2014, Barden Building Company constructed various assets at a total cost of $12,600,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2014 were $8,400,000. The company had the following debt outstanding at December 31, 2014:
1.
10%, 5-year note to finance construction of various assets,
dated January 1, 2014, with interest payable annually on January 1
$5,400,000
2.
12%, ten-year bonds issued at par on December 31, 2008, with interest
payable annually on December 31
6,000,000
3.
9%, 3-year note payable, dated January 1, 2013, with interest payable
annually on January 1
3,000,000
Instructions
Compute the amounts of each of the following (show computations).
1.
Avoidable interest.
2.
Total interest to be capitalized during 2014.
Answers: 3
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