On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for...
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Accounting
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,350,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:
$7,000,000, 14% bonds
$3,000,000, 9% long-term note
Construction expenditures incurred during 2021 were as follows:
January 1
$
960,000
March 31
1,560,000
June 30
1,232,000
September 30
960,000
December 31
760,000
Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)
Date
Expenditure
Weight
Average
January 1
x
=
March 31
x
=
June 30
x
=
September 30
x
=
December 31
x
=
Accumulated expenditure
$0
$0
Average
Interest Rate
Capitalized Interest
Average accumulated expenditures
$0
x
%
=
$0
x
%
=
0
$0
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