On January 1, 2020, Sheridan Company purchased land for an office site by paying $2670000...
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Accounting
On January 1, 2020, Sheridan Company purchased land for an office site by paying $2670000 cash. Sheridan began construction on the office building on January 1. The following expenditures were incurred for construction:
Date
Expenditures
January 1, 2020
$ 1700000
April 1, 2020
2520000
May 1, 2020
4410000
June 1, 2020
4760000
The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3690000 was borrowed on January 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $1480000, 12%, 6-year note payable dated January 1, 2020. Assume the weighted-average accumulated expenditures for the construction project are $4370000. The amount of interest cost to be capitalized during 2020 is
$413700.
$454350.
$393300.
$509700.
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