On December 31, 2019, Ivanhoe Inc. borrowed $4,080,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $489,600; June 1, $816,000; July 1, $2,040,000; December 1, $2,040,000. The building was completed in February 2021. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding 10-year, 13% bond, December 31, 2013, interest payable annually 6-year, 10% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $204,000 Interest revenue earned in 2020 $5,440,000 $2,176,000 The amount of interest $ $66,640 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
On December 31, 2019, Ivanhoe Inc. borrowed $4,080,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $489,600; June 1, $816,000; July 1, $2,040,000; December 1, $2,040,000. The building was completed in February 2021. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding 10-year, 13% bond, December 31, 2013, interest payable annually 6-year, 10% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $204,000 Interest revenue earned in 2020 $5,440,000 $2,176,000 The amount of interest $ $66,640 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
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 18E
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Subject: acc
Transcribed Image Text:On December 31, 2019, Ivanhoe Inc. borrowed $4,080,000 at 12% payable annually to finance the construction of a new building. In
2020, the company made the following expenditures related to this building: March 1, $489,600; June 1, $816,000; July 1,
$2,040,000; December 1, $2,040,000. The building was completed in February 2021. Additional information is provided as follows.
1.
2.
3.
(a)
Other debt outstanding
10-year, 13% bond, December 31, 2013, interest payable annually
6-year, 10% note, dated December 31, 2017, interest payable annually
March 1, 2020, expenditure included land costs of $204,000
Interest revenue earned in 2020
$5,440,000
$2,176,000
The amount of interest $
$66,640
Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
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