On January 1, 2016, the Marjlee Company began construction of an office building to be used as its corp0- rate headquarters. The building was completed early in 2017. Construction expenditures for 2016, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2016: Construction loan, 10% Long-term note, 9% Long-term note, 6% $1,500,000 2,000,000 4,000,000 Required: Calculate the amount of interest capitalized in 2016 for the building using the specific interest method.
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- On December 31, 2016, Marin Inc. borrowed $3,720,000 at 13% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $446,400; June 1, $744,000; July 1, $1,860,000; December 1, $1,860,000. The building was completed in February 2018. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2010, interest payable annually $4,960,0006-year, 11% note, dated December 31, 2014, interest payable annually $1,984,0002. March 1, 2017, expenditure included land costs of $186,000 3. Interest revenue earned in 2017 $60,760 Determine the amount of interest to be capitalized in 2017 in relation to the construction of the building. The amount of interestOn December 31, 2016, Headland Inc. borrowed $840,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: June 1, $336,000; July 1, $504,000; September 1, $1,008,000; December 1, $504,000. The building was completed in April 2018. Additional information is provided as follows. 1. Other debt outstanding 10-year, 10% bond, dated December 31, 2010, interest payable annually $8,400,000 15-year, 12% note, dated December 31, 2004, interest payable annually $2,100,000 2. Interest revenue earned in 2017 $5,040 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2017During 2017, Reticulated Company constructed a new manufacturing facility at a cost of P30,000,000. The expenditures for this building, which was finished late in 2017, were incurred evenly during the year. The entity had the following loans outstanding at December 31, 2017. 10% note to finance specifically construction of the manufacturing facility, dated January 1, 2017, P10,000,000. Unpaid as of December 31, 2017. Investments were made on the proceeds from this loan and income of P100,000 was realized in 2017. 12%, 20-years bonds payable issued at face value on April 30, 2016, P30,000,000. 8%, 5-years payable, dated March 1, 2016, P10,000,000. What amount of interest is capitalized as cost of the new building? A. 1,550,000 B. 1,450,000 C. 1,400,000 D. 1,500,000
- On December 21, 2013, Jumble Inc. borrowed $1,000,000 at 10% payable annually to finance the construction of a new building. In 2014, the company made the following expenditures realated to this building. Jun-1 $400,000 July-1 $600,000 Sep-1 $1,200,000 Dec-1 $600,000 The building was completed in April 2015. Additional information is provided as follows: 1) other debt outstanding: 10-year, 8% bond dated December 31,2012, interest payable annually $10,000,000 15-year, 10% note, dated December 31, 2012, interest payable annually $2,500,000 2) Interest revenue earned in 2014 $6,000 INSTRUCTIONS: A) Determine the amount of interest to be capitalized in 2014 in relation to the construction of the building B) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2014On January 1, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $6,900,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 10% $ 1,725,000 Long-term note, 9% 2,300,000 Long-term note, 6% 4,600,000 Required: Calculate the amount of interest capitalized in 2024 for the building using the specific interest method.Tamarisk Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $9,000,000 on January 1, 2017. Tamarisk expected to complete the building by December 31, 2017. Tamarisk’s debt, all of which was outstanding during the construction period, was as follows. ● Construction loan—11% interest, payable semiannually, issued December 31, 2016; $4,500,000 ● Long-term loan #1 – 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,350,000 ● Long-term loan #2—12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,150,000 Avoidable interest is 679,680. Compute the depreciation expense for the year ended December 31, 2018. Tamarisk estimated the facility’s useful life to be 25 years with a salvage value of $900,000. Tamarisk elected to depreciate the facility on a straight-line basis.
- Tamarisk Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $9,000,000 on January 1, 2017. Tamarisk expected to complete the building by December 31, 2017. Tamarisk’s debt, all of which was outstanding during the construction period, was as follows. ● Construction loan—11% interest, payable semiannually, issued December 31, 2016; $4,500,000 ● Long-term loan #1 – 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,350,000 ● Long-term loan #2—12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,150,000 Assume that Tamarisk completed the facility on December 31, 2017, at a total cost of $9,270,000, and the weighted-average amount of accumulated expenditures was $6,120,000.Compute the avoidable interest on this projectOn January 1, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $5,400,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 12% $ 1,350,000 Long-term note, 11% 1,800,000 Long-term note, 8% 3,600,000 1. Calculate the amount of interest capitalized in 2024 for the building using the specific interest method.Skysong Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $8,600,000 on January 1, 2017. Skysong expected to complete the building by December 31, 2017. Skysong’s debt, all of which was outstanding during the construction period, was as follows. ● Construction loan—11% interest, payable semiannually, issued December 31, 2016; $4,300,000 ● Long-term loan #1 – 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,290,000 ● Long-term loan #2—12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,010,000 Assume that Skysong completed the facility on December 31, 2017, at a total cost of $8,858,000, and the weighted-average amount of accumulated expenditures was $5,848,000.A. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to 0 decimal places,…
- Skysong Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $11,000,000 on January 1, 2017. Skysong expected to complete the building by December 31, 2017. Skysong’s debt, all of which was outstanding during the construction period, was as follows. ● Construction loan—11% interest, payable semiannually, issued December 31, 2016; $5,500,000 ● Long-term loan #1 – 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,650,000 ● Long-term loan #2—12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,850,000 (a) Assume that Skysong completed the facility on December 31, 2017, at a total cost of $11,330,000, and the weighted-average amount of accumulated expenditures was $7,480,000.Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to 0 decimal…During 2017, Egyptian Mau Company construct building costing P18,500,000. The weighted average accumulated expenditures on the building during 2017 totaled P7,800,000. The entity borrowed P4,000,000 at 7% on January 1, 2017. Funds not needed for construction were temporarily invested in short-term securities, and earned P120,000 interest revenue. In addition to the construction loan, the entity had two other notes outstanding during the year, P3,000,000, 10-year, 10% note payable dated October 1, 2015, and a 5-year P2,000,000, 8% note payable dated November 2, 2015. What amount of interest should be capitalized on December 31, 2017? A. 574,000 B. 620,000 C. 509,600 D. 629,600Teal Mountain Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $9,200,000 on January 1, 2017. Teal Mountain expected to complete the building by December 31, 2017. Teal Mountain’s debt, all of which was outstanding during the construction period, was as follows. ● Construction loan—11% interest, payable semiannually, issued December 31, 2016; $4,600,000 ● Long-term loan #1 – 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,380,000 ● Long-term loan #2—12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,220,000 Assume that Teal Mountain completed the facility on December 31, 2017, at a total cost of $9,476,000, and the weighted-average amount of accumulated expenditures was $6,256,000.Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to 0 decimal…