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On June 1, 2023, a company began construction of a new manufacturing plant. The plant...

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Accounting

On June 1, 2023, a company began construction of a new manufacturing plant. The plant was completed on October 31, 2024. Expenditures on the project were as follows ($ in millions):

July 1, 2023 72
October 1, 2023 40
February 1, 2024 48
April 1, 2024 30
September 1, 2024 29
October 1, 2024 15

On July 1, 2023, the company obtained a $97 million construction loan with a 10% interest rate. The loan was outstanding through the end of October, 2024. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 12%. This note was outstanding during all of 2023 and 2024. The company's fiscal year-end is December 31.

What is the amount of interest that should be capitalized in 2024, using the specific interest method?

Note: Round your answers to the nearest thousand.

Multiple Choice

$17,324,000

$17,359,000

$18,816,000

None of the other answer choices are correct.

Answer & Explanation Solved by verified expert
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