Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan – 3,000,000 – 10% General loan – 25,000,000 – 12% The entity began the self-construction of a new building January 1, 2021 and the building was completed on June 30, 2022. The following expenditures were made: January 1, 2021 - 4,000,000 April 1, 2021 - 5,000,000 December 1, 2021 - 3,000,000 March 1, 2021 - 6,000,000 Required: Compute the cost of the new building on December 31, 2021 and June 30, 2022. Compute the interest expense for 2021 and 2022.
Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan – 3,000,000 – 10% General loan – 25,000,000 – 12% The entity began the self-construction of a new building January 1, 2021 and the building was completed on June 30, 2022. The following expenditures were made: January 1, 2021 - 4,000,000 April 1, 2021 - 5,000,000 December 1, 2021 - 3,000,000 March 1, 2021 - 6,000,000 Required: Compute the cost of the new building on December 31, 2021 and June 30, 2022. Compute the interest expense for 2021 and 2022.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 8RE
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Molave Company had the following outstanding loans during 2021 and 2022.
Specific construction loan – 3,000,000 – 10%
General loan – 25,000,000 – 12%
The entity began the self-construction of a new building January 1, 2021 and the building was completed on June 30, 2022. The following expenditures were made:
January 1, 2021 - 4,000,000
April 1, 2021 - 5,000,000
December 1, 2021 - 3,000,000
March 1, 2021 - 6,000,000
Required:
- Compute the cost of the new building on December 31, 2021 and June 30, 2022.
- Compute the interest expense for 2021 and 2022.
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