Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. e10-8. (capitalization of interest) (lo 3) on dece

E10-8. (Capitalization of Interest) (LO 3) On December 31, 2016, Main Inc. borrowed $3,000,000 at...

60.1K

Verified Solution

Question

Accounting

image

E10-8. (Capitalization of Interest) (LO 3) On December 31, 2016, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500,000; December 1, $1,500,000. The building was completed in February 2018. Additional information is provided as follows. 1. Other debt outstanding 10-year, 13% bond, December 31, 2010, interest payable annually $4,000,000 6-year, 10% note, dated December 31, 2014, interest payable annually $1,600,000 2. March 1, 2017, expenditure included land costs of $150,000 3. Interest revenue earned in 2017 $49,000 Instructions (a) Determine the amount of interest to be capitalized in 2017 in relation to the construction of the building (b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2017

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Small moving containers can hold no more than 25 pounds If w represents the weight...

Algebra
Q

People were polled on how many books the read the previous year. Initial survey results indicate...

Statistics
Q

In the 2015 federal election, 39.5% of the electorate voted for the Liberal party, 31.9% for...

Basic Math
Q

Do some research on corporate sustainability reports. Research at least three corporations that issue annual reports...

General Management
Q

A company is considering purchasing a new second machine in order to expand their business. The...

Accounting
Q

A difference of 2 3 eV separates two energy levels in an atom What is...

Physics
Q

You play darts with a friend The board is a circle with a 6 inch...

Geometry
Q

single card is selected from an ordinary deck of cards The sample spat Hearts red...

Basic Math
Q

Find the slope from the given equation: y = -4x + 21(A) 21(B) -4(C) -1

Algebra
Q

Lavage Rapide is a Canadlan company that owns and operates a large automatic car wash...

Accounting
Q

Cul de las siguientes cantidades de un presupuesto flexible permanece constante, dentro del rango relevante...

Accounting
Q

The Alpine House, Incorporated, is a large retaller of snow skls. The company assembled the...

Accounting