On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020
On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020
Chapter3: Income Sources
Section: Chapter Questions
Problem 43P
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On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows:
| January 2, 2020 | $ 609000 |
| September 1, 2020 | 1802400 |
| December 31, 2020 | 1802400 |
| March 31, 2021 | 1802400 |
| September 30, 2021 | 1203000 |
Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.
The interest capitalized for 2020 was:
A)$505656
B)$108882
C)$145176
D)$289368
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