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On December 31, 2019, Nash Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building in 2020, the company made the following expenditures related to this building: March 1, $396.000: June 1, $660,000: July 1, $1,650,000: December 1. $1.650,000. The building was completed in February 2021. Additional information is provided as follows 1. 2 Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually 6-year, 11% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $165,000 3. Interest revenue earned in 2020 Your answer is incorrect. $4,400,000 $1,760,000 The amount of interest $53,900 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building

On December 31, 2019, Nash Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building in 2020, the company made the following expenditures related to this building: March 1, $396.000: June 1, $660,000: July 1, $1,650,000: December 1. $1.650,000. The building was completed in February 2021. Additional information is provided as follows 1. 2 Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually 6-year, 11% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $165,000 3. Interest revenue earned in 2020 Your answer is incorrect. $4,400,000 $1,760,000 The amount of interest $53,900 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building

Intermediate Accounting: Reporting And Analysis
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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On December 31, 2019, Nash Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $396,000: June 1, $660,000: July 1, $1,650,000: December 1, $1.650,000. The building was completed in February 2021. Additional information is provided as follows 1. 2. 3. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually 6-year, 11% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $165,000 Interest revenue earned in 2020 Your answer is incorrect. $4,400,000 $1,760,000 The amount of interest $ $53.900 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
Transcribed Image Text:On December 31, 2019, Nash Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $396,000: June 1, $660,000: July 1, $1,650,000: December 1, $1.650,000. The building was completed in February 2021. Additional information is provided as follows 1. 2. 3. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually 6-year, 11% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $165,000 Interest revenue earned in 2020 Your answer is incorrect. $4,400,000 $1,760,000 The amount of interest $ $53.900 Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
Your answer is partially correct. Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) ate er 31, 2020 Account Titles and Explanation interest expense Debit Credit
Transcribed Image Text:Your answer is partially correct. Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) ate er 31, 2020 Account Titles and Explanation interest expense Debit Credit
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