2019 January 1 May 1 October 1 $ 540,000 465,000 600,000 2020: March 1 1,500,000 600,000 June 30
2019 January 1 May 1 October 1 $ 540,000 465,000 600,000 2020: March 1 1,500,000 600,000 June 30
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16P: Tenth National Bank has a 200,000, 12% note receivable from Priday Company that is due on December...
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Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available:
- Capitalization period: January 1,2019 to june 30,2020
- Expenditures on project:
Amounts borrowed and outstanding
- $1.5 million borrowed at 12% specifically for the project
- $6 million borrowed on July 1, 2015 at 14%
- $14 million borrowed on January 1,2014, at 8%
Required :
1. Compute the amount of intrest costs capitalized each year
2. If it is assumed tha the production complex has an extimated life of 20years and a residual value of $0, Compute the straight - line
3. Next Level Explain the effects of the interest capitalization on the financial statements for both years ignore income taxes.
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