Walmart Blackout Power Company constructed a new power plant to supply energy to the Castle Electrical Grid. The construction began on January 2 and ended on December 31 of the current year. On the date of completion, the plant had atotal cost of $8,540,000. The weighted-average accumulated expenditures for the year were S4,220,000. The company had the following debt outstanding for the entire year:E (Click the icon to view outstanding debt.)Read the requirements.- XOutstanding DebtsDebt Instrument and PurposeAmount$ 2,015,000$ 3,200,0005% note payable: Used to finance the power plant construction projectCalculate the actual interest cost for the current year.10% bond payable: Used to finance maintenance of local transmittersDebt TypePrincipalInterest RateActual Interest12% note payable: Used to finance construction of corporate headquarters$ 4,800,0002,015,000100,7505% Note Payable (Specific)10% Note Payable (General)3,200,00010 %320,000Requirements12% Note Payable (General)4.800.00012 %576,0008.000.000896,000Total General Debta. Compute the amount of interest to be capitalized for the current yBar.Total996,750b.Compute the armount of interest to be expensed in the current year.c. Prepare the journal entry to record the cash interest payments for the currentyear. Assume that all interest is paid at the end of the year and any Interestcapitalizod is dobited to the construction in progress account.Now, compute the avoidable interest for the current year. (Enter the Interest rates to the nearest hundredth of a percent, X.XX%.)Weighted-AverageInterestAvoidableDebt TypeAccumulated ExpendituresInterestRateSpecific Debt2,015,0005 %100,750PrintDoneGeneral DebtTotal

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Walmart Blackout Power Company constructed a new power plant to supply energy to the Castle Electrical Grid. The construction began on January 2 and ended on December 31 of the current year. On the date of completion, the plant had a total cost of $8,540,000. The weighted-average accumulated expenditures for the year were S4,220,000. The company had the following debt outstanding for the entire year: E (Click the icon to view outstanding debt.) Read the requirements. - X Outstanding Debts Debt Instrument and Purpose Amount 5 $ 2015,000 5% note payable: Used to finance the power plant construction project Calculate the actual interest cost for the current year. 10% bond payable: Used to finance maintenance of local transmitters $ 3,200,000 Debt Type Actual Interest 100.750 Interest Rate Principal $2.015.000 12% note payable: Used to finance construction of corporate headquarters $ 4,800,000 5% Note Payable (Specific) 5 % - X 10% Note Payable (General) 3.200,000 10 % 320,000 Requirements 12% Note Payable (General) 4,800,000 12 % 576,000 8.000.000 896,000 Total General Debt a. Compute the amount of interest to be capitalized for the current year. b. Compute the amount of interest to be expensed in the current year. c. Prepare the journal entry to record the cash interest payments for the current year. Assume that all interest is paid at the end of the year and any interest capitalized is dobitod to the construction in progress account. 998,750 Total Now, compute the avoldable interest for the current year. (Enter the Interest rates to the nearest hundredth of a percent, X.XX%.) Weighted-Average Interest Avoidable Debt Type Accumulated Expenditures Rate Interest Specific Debt 2,015,000 100,750 Print Done General Debt Total

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5PB: Johnson, Incorporated, had the following transactions during the year: Purchased a building for...