Early in 2021, Dulcinea Corporation engaged Mikell, Inc. to design and construct a complete modernization...
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Accounting
Early in 2021, Dulcinea Corporation engaged Mikell, Inc. to design and construct a complete modernization of Dulcieneas manufacturing facility. Construction was begun on June 1, 2021 and was completed on December 31, 2021. Dulcinea made the following payments to Mikell, Inc. during 2021:
June 1 $3,000,000
October 1 4,400,000
December 1 1,200,000
In order to help finance the construction, Dulcinea issued $2,000,000 of 10-year, 6% bonds payable, issued at par on May 31, 2021, with interest payable annually on May 31. In addition, Dulcinea had a $2,500,000, 7% note payable dated January 1, 2005 and due January 1, 2022, with interest payable annually on January 1 and a $750,000, 4% note payable dated July 1, 2009 and due June 30, 2022, with interest payable annually on June 30
a. Calculate the weighted-average accumulated expenditures.
b. Calculate avoidable interest.
c. Calculate total amount of interest to be capitalized during 2021.
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