Home / Questions / Capitalized Interest Multiple-Year Computation Refer to Practice 10-6 Assume that constru...
Capitalized Interest: Multiple-Year Computation
Refer to Practice 10-6. Assume that construction was not completed on December 31 of Year 1. Also assume that the same loans were outstanding for all of Year 2.The following expenditure was made during Year 2:
|
July 1 |
$500,000 |
Final construction was completed on December 31 of Year 2. Compute (1) the amount of interest capitalized during Year 2 and (2) the recorded cost of the building at the end of Year 2.
Practice 10-6
Capitalized Interest: Single-Year Computation
The company had the following loans outstanding for the entire year:
|
Amount |
Interest Rate |
|
|
Specific construction loan |
$100,000 |
10% |
|
General loan |
2,000,000 |
12 |
The company began the self-construction of a building on January 1. The following expenditures were made during the year:
|
1-Jan |
$100,000 |
|
1-May |
200,000 |
|
1-Nov |
300,000 |
|
Total |
$600,000 |
Construction was completed on December 31. Compute (1) the amount of interest capitalized during the year and (2) the recorded cost of the building at the end of the year.
Jun 17 2020 View more View Less
Consider an asset that costs $783,200 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of...
Jun 16 2021Can someone define and illustrate monomers and polymers. Describe how a beaded necklace relates to the idea of monomers and polymers.
Apr 17 2020On January 1, 2018. Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedul...
Mar 20 2020Under the UCC Sales Article, the warranty of title may be excluded by:a.Merchants or nonmerchants, provided the exclusion is in writing.b.Nonmerchant sellers only.c.The s...
Aug 04 2021Planetary Motion The planets travel in elliptical orbits with the sun as a focus, as shown in the figure.(a) Show that the polar equation of the orbit is given bywhere e ...
Aug 14 2021Suppose that a small open economy starts at a long-run equilibrium. Now assume that a new president gets elected to office and he brings to the government the best 5 econ...
Jul 01 2021Over past year u earned 11.9% over all on an investment. Inflation rate 2.8%. Risk free rate on return 3.2%. What real rate did u earn?A) 8.43% B) 8.75% C) 8.85% D) 9.1%
May 31 20211. What constitutes a short-haul microwave system? A long-haul microwave system?2. Describe the baseband signal for a microwave system.3. Why do FDM/FM microwave systems ...
Jul 28 2020Examine the significance of light and dark in the story “Sonny’s Blues.” What does each represent and how does this dynamic relate to the character’s experiences?
Feb 14 2020Control may be of different types and these can be classified on the basis of the elements to be controlled and the stage at which control can be exercised Vibgyor Electr...
Nov 28 2017