On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building wascompleted in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to theconstruction loan, Highlands had the following debt outstanding throughout 2021:$8,000,000, 14% bonds$2,000,000, 9% long-term noteConstruction expenditures incurred during 2021 were as follows:January 1March 31June 30September 30December 31Date$ 880,0001,480,0001,136,000Required:Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the Intermediate calculations.Round your percentage answers to 1 decimal place (l.e. 0.123 should be entered as 12.3%).)January 1March 31June 30September 30December 31Accumulated expenditure880,000680,000Average accumulated expendituresExpenditureAmountxxXXXXWeightInterestRate%6%6=====AverageCapitalizedInterest

Interest capitalize: The unpaid interest on your loan is added to the principle sum, which is what…

On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the Intermediate calculations. Round your percentage answers to 1 decimal place (l.e. 0.123 should be entered as 12.3% ).) Average January 1 March 31 June 30 Date $ 880,000 1,480,000 1,136,000 880,000 680,000 September 30 December 31 Accumulated expenditure Average accumulated expenditures Expenditure Amount x x X X X X x Weight Interest Rate % % = = = Capitalized Interest

On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the Intermediate calculations. Round your percentage answers to 1 decimal place (l.e. 0.123 should be entered as 12.3% ).) Average January 1 March 31 June 30 Date $ 880,000 1,480,000 1,136,000 880,000 680,000 September 30 December 31 Accumulated expenditure Average accumulated expenditures Expenditure Amount x x X X X X x Weight Interest Rate % % = = = Capitalized Interest

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000
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