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pectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annuallycompany's fiscal year-end is December 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method.2. What is the total.cost of the building?3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.Answer is not complete.Complete this question by entering your answers in the tabs below.Req 1 and 3 Req 2Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method and interestexpense that will appear in the 2018 and 2019 income statements. (Enter your answers in dollars.)20182019InterestcapitalizedInterest expense s 1,368,000624,00o 1,086,084Req 1 and 3Req 2>< Prev 5of 5 Next

Question

On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019.
 
Expenditures on the project were as follows:
 

       
January 1, 2018 $ 1,710,000  
March 1, 2018   1,320,000  
June 30, 2018   1,520,000  
October 1, 2018   1,320,000  
January 31, 2019   378,000  
April 30, 2019   711,000  
August 31, 2019   1,008,000  
 

 
On January 1, 2018, the company obtained a $4,200,000 construction loan with a 16% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 12% and 14%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.
 
Required:
1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.

I keep getting the wrong answer for total capitalization and expense

also i try doing the cost of the building

pectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually
company's fiscal year-end is December 31.
Required:
1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method.
2. What is the total.cost of the building?
3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Req 1 and 3 Req 2
Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method and interest
expense that will appear in the 2018 and 2019 income statements. (Enter your answers in dollars.)
2018
2019
Interest
capitalized
Interest expense s 1,368,000
624,00o 1,086,084
Req 1 and 3
Req 2>
< Prev 5of 5 Next
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pectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually company's fiscal year-end is December 31. Required: 1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method. 2. What is the total.cost of the building? 3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 3 Req 2 Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method and interest expense that will appear in the 2018 and 2019 income statements. (Enter your answers in dollars.) 2018 2019 Interest capitalized Interest expense s 1,368,000 624,00o 1,086,084 Req 1 and 3 Req 2> < Prev 5of 5 Next

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Step 1

Capitalized Interest:

 

Capitalized Interest refers to the interest charge on the acquisition of long term loans or assets. It is not an interest expense which is shown in the income statement rather it is capitalized and depreciated over the years.

Step 2

1.

 

2018

 

Calculation of total expenditure:

Calculation of capitalized interest:

Thus, the Capitalized Interest for 2018 is $624,000.

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Step 3

2019

 

Project completed on September 30, 2019, so interest expense will be for 9 months for 2019, which is from January to September.

 

Calculation of total expenditure:

 

Thus, the to...

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