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Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. Required: 1. Compute the amount of interest capitalized related to the construction of the building. 2. If the expenditures are assumed to have been incurred evenly throughout the year, compute weighted average accumulated expenditures and the amount of interest capitalized on the building.

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 10, Problem 16E
Textbook Problem

Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were:

Chapter 10, Problem 16E, Interest During Construction Matrix Inc. borrowed 1,000,000 at 8% to finance the construction of a

In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year.

Required:

  1. 1. Compute the amount of interest capitalized related to the construction of the building.
  2. 2. If the expenditures are assumed to have been incurred evenly throughout the year, compute weighted average accumulated expenditures and the amount of interest capitalized on the building.

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Chapter 10 Solutions

Intermediate Accounting: Reporting And Analysis
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