Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed...
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Accounting
Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed on March 31, 2025. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$3,000,000, 12% note
$7,000,000, 7% bonds
Construction expenditures incurred were as follows:
July 1, 2024
$ 700,000
September 30, 2024
990,000
November 30, 2024
990,000
January 30, 2025
930,000
The companys fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2024 and 2025.
Calculate the amount of interest capitalized for 2024. Note: 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
July 1, 2024
x
=
September 30, 2024
x
=
November 30, 2024
x
=
Accumulated expenditures
Amount
Interest Rate
Portion of Year Outstanding
Capitalized Interest
Average accumulated expenditures
x
%
x
=
Answer & Explanation
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