On March 1, 2019, Newton Company purchased land for an office site by paying 540,000...
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Accounting
On March 1, 2019, Newton Company purchased land for an office site by paying 540,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction:
Date Expenditures
March 1, 2019 360,000
April 1, 2019 504,000
May 1, 2019 900,000
June 1, 2019 1,440,000
The office was completed and ready for occupancy on July 1. To help pay for construction, 720,000 was borrowed on March 1, 2019 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2015 was a 300,000, 12%, 6-year note payable dated January 1, 2019.
Assume the weighted-average accumulated expenditures for the construction project are 870,000. The amount of interest cost to be capitalized during 2019 is
a. 41,400.
b. 27,600.
c. 90,000.
d. 100,800.
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