Hawkins Corporation began construction of a motel on March 31, 2024. The project was completed on April 30, 2025. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $4,600,000, 6% note $20,440,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2024 $ 4,540,000 June 30, 2024 6,540,000 November 30, 2024 1,908,000 February 28, 2025 3,540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025.
Hawkins Corporation began construction of a motel on March 31, 2024. The project was completed on April 30, 2025. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $4,600,000, 6% note $20,440,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2024 $ 4,540,000 June 30, 2024 6,540,000 November 30, 2024 1,908,000 February 28, 2025 3,540,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025.
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
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 9RE: Dexter Construction Corporation is building a student condominium complex; it started construction...
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Transcribed Image Text:Hawkins Corporation began construction of a motel on March 31, 2024. The project was completed on April 30, 2025. No new loans were required to fund construction.
Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$4,600,000, 6% note
$20,440,000, 10% bonds
Construction expenditures incurred were as follows:
March 31, 2024 $ 4,540,000
June 30, 2024
6,540,000
November 30, 2024 1,908,000
February 28, 2025 3,540,000
The company's fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2024 and 2025.
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