On July 31, 2020, Whispering Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed orNovember 1, 2020. To help finance construction, on July 31 Whispering issued a $320,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July31.$211,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities)at 10% until November 1. On November 1, Whispering made a final $109,000 payment to Minsk. Other than the note to Netherlands, Whispering's only outstanding liability at December31, 2020, is a $31,100, 8 % , 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.Your answer is correct.Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.$Interest revenue2725Weighted-average accumulated expenditures$52,850Avoidable interest6,342Interest capitalized6,342 Prepare the journal entries needed on the books of Whispering Company at each of the following dates. (Credit account titles are automatically indented when amount is entered. Do notindent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts,)(1)July 31, 2020.(2)November 1, 2020.December 31, 2020.(3)Account Titles and ExplanationDebitDateCredit3,20,4007/31CashNotes Payable3,20,400(To record the note.)Machinery2.11.4001,09,0003,20.400(To record the payment to Minsk)11/11,09,000MachineryCash1,09,000To record the payment to Minsk.)12/31Machinery6.342Interest Expense12,326Cash2,648Interest Payable16,020

Question
Asked Nov 30, 2019
115 views

it was wrong i need help 

On July 31, 2020, Whispering Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed or
November 1, 2020. To help finance construction, on July 31 Whispering issued a $320,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July
31.$211,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities)
at 10% until November 1. On November 1, Whispering made a final $109,000 payment to Minsk. Other than the note to Netherlands, Whispering's only outstanding liability at December
31, 2020, is a $31,100, 8 % , 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.
Your answer is correct.
Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.
$
Interest revenue
2725
Weighted-average accumulated expenditures
$
52,850
Avoidable interest
6,342
Interest capitalized
6,342
help_outline

Image Transcriptionclose

On July 31, 2020, Whispering Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed or November 1, 2020. To help finance construction, on July 31 Whispering issued a $320,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31.$211,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Whispering made a final $109,000 payment to Minsk. Other than the note to Netherlands, Whispering's only outstanding liability at December 31, 2020, is a $31,100, 8 % , 6-year note payable, dated January 1, 2017, on which interest is payable each December 31. Your answer is correct. Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020. $ Interest revenue 2725 Weighted-average accumulated expenditures $ 52,850 Avoidable interest 6,342 Interest capitalized 6,342

fullscreen
Prepare the journal entries needed on the books of Whispering Company at each of the following dates. (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,)
(1)
July 31, 2020.
(2)
November 1, 2020.
December 31, 2020.
(3)
Account Titles and Explanation
Debit
Date
Credit
3,20,400
7/31
Cash
Notes Payable
3,20,400
(To record the note.)
Machinery
2.11.400
1,09,000
3,20.400
(To record the payment to Minsk)
11/1
1,09,000
Machinery
Cash
1,09,000
To record the payment to Minsk.)
12/31
Machinery
6.342
Interest Expense
12,326
Cash
2,648
Interest Payable
16,020
help_outline

Image Transcriptionclose

Prepare the journal entries needed on the books of Whispering Company at each of the following dates. (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,) (1) July 31, 2020. (2) November 1, 2020. December 31, 2020. (3) Account Titles and Explanation Debit Date Credit 3,20,400 7/31 Cash Notes Payable 3,20,400 (To record the note.) Machinery 2.11.400 1,09,000 3,20.400 (To record the payment to Minsk) 11/1 1,09,000 Machinery Cash 1,09,000 To record the payment to Minsk.) 12/31 Machinery 6.342 Interest Expense 12,326 Cash 2,648 Interest Payable 16,020

fullscreen
check_circle

Expert Answer

Step 1

Step 1:...

Computation of weighted average accumulated expenditures
$211,400*3/12 = $ 52,850
3 months is taken from July to November
Computation of interest revenue
$109,000*10% 3/12 = $2,725
Computation of avoidable interest
$52,850*12%=$6,342
Interest capitalized
$6,342
help_outline

Image Transcriptionclose

Computation of weighted average accumulated expenditures $211,400*3/12 = $ 52,850 3 months is taken from July to November Computation of interest revenue $109,000*10% 3/12 = $2,725 Computation of avoidable interest $52,850*12%=$6,342 Interest capitalized $6,342

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: At the end of 2021, Kingbird Co. has accounts receivable of $691,500 and an allowance for doubtful a...

A: (a)Entry to record the write off.

question_answer

Q: Consider these transactions: (Credit account titles are automatically indented when amount is entere...

A: a. In the given journal entry, cash and service charges is being debited. The reason being, cash is ...

question_answer

Q: If the effect of the debit portion of an adjusting entry is to increase the balance of an asset acco...

A: If a debit portion of adjusting entry increase the balance of an asset account, the credit portion w...

question_answer

Q: David Jackson invests $40,200 at 8% annual interest, leaving the money invested without withdrawing ...

A: Determine the amount of interest earned at the end of year 8.

question_answer

Q: Selected transactions completed by a proprietorship are described below. Indicate the effects of eac...

A: Rules of Debit and Credit:  Debit an increase in asset account, increase in expense account, decreas...

question_answer

Q: Assume that Dorothy Williams desires to accumulate $926,000 in 15 years using her money market fund ...

A: We will follow the below steps to calculate the Compund interest rate-1.) Base amount is = $254222- ...

question_answer

Q: For each of the following situations, indicate the liability amount, if any, which is reported on th...

A: Liabilities:The claims creditors have over assets or resources of a company are referred to as liabi...

question_answer

Q: Assume that when a purchase of supplies of $2,650 for cash was recorded, both the debit and the cred...

A: a) State whether the given error would cause the trial balance to be out of balance. No, the given e...

question_answer

Q: An employee earned $62,500 during the year working for an employer. The FICA tax rate for Social Sec...

A: Federal Unemployment Tax Act (FUTA): The federal unemployment tax is welfare scheme of a social secu...