Use the following to answer questions 6 through 9: On January 1,2018, Grinch Inc. began...
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Use the following to answer questions 6 through 9: On January 1,2018, Grinch Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 September 1,2018 December 31, 2018 March 31, 2019 September 30, 2019 $200,000 $300,000 $300,000 $300,000 $200,000 Grinch borrowed $750,000 at 12% interest on January 1, 2018 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2018 and2019. The company uses the specific interest method to capitalize interest, and their year ends on December 31" 8. Interest expense reported by Grinch Inc. on its 2018 income statement was: A) $495,000 B) $459,000 C) $405,000 D) S90,000
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