I need the interest expense. On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. Thebuilding was completed on September 30, 2022. Expenditures on the project were as follows:January 1, 2021March 1, 2021June 30, 2021October 1, 2021January 31, 2022April 30, 2022August 31, 2022$1,000,000600,000800,000600,000270,000585,000900,000On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2021and 2022. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest ratesof 6% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. Thecompany's fiscal year-end is December 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method.2. What is the total cost of the building?3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements. On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2021and 2022. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest ratesof 6% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. Thecompany's fiscal year-end is December 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method.2. What is the total cost of the building?3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.Complete this question by entering your answers in the tabs below.Req 1 and 3Req 2Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method and interestexpense that will appear in the 2021 and 2022 income statements. (Do not round intermediate calculations. Enter youranswers in dollars.)Interest capitalizedInterest expense$2021205,000 $2022271,980< Req 1 and 3Req 2 >

Interest Expenses :- interest expenses is the cost of Borrowing which is Payable by the Borrower…

Answered: 3. Calculate the amount of interest…

Business

Accounting

3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 29P

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