4. The following information pertains to Our Company's self-constructed building project Our Company is building...
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4. The following information pertains to Our Company's self-constructed building project Our Company is building a project for its own use. We have been asked to calculate the amount of interest to be capitalized. 2 3 4 5 6 17 18 279 30 81 82 83 2020 Payments: Specific construction debt: 1/31/20 615,000 $1,200,000, 4%, 5-year note, dated 12/31/18, 2/28/20 600,000 interest paid annually on 12/31 6/1/20 960,000 12/1/20 825,000 Other debt: 3,000,000 $1,125,000, 6%, annual interest paid 12/31, dated 12/31/18 $1,350,000, 9%, 10 year bonds, dated 12/31/17, interest paid 12/31 How much is the weighted average of the accumulated expenditures? How much is the weighted average of the interest rates on other debt? c. How much is the avoidable interest? d. How much is the actual interest? How much is recorded as the interest expense? 4. How much interest should be capitalized? a b 84 e. 85 86 87 88 89 90 91 92
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