Bonita Corporation began constructing a new plant facility in 2025. The building is expected to be completed on October 1, 2025. 2025 payments to the contractor are $204,000 on January 4, $336,000 on April 1, $312,000 on July 1 and $114,000 on September 1. Bonita has secured a construction loan of $600,000 at 6% interest on January 4, 2025. Bonita has no other debt outstanding. What is the interest amount to capitalize? Interest to capitalize $

Bonita Corporation began constructing a new plant facility in 2025. The building is expected to be completed on October 1, 2025. 2025 payments to the contractor are $204,000 on January 4, $336,000 on April 1, $312,000 on July 1 and $114,000 on September 1. Bonita has secured a construction loan of $600,000 at 6% interest on January 4, 2025. Bonita has no other debt outstanding. What is the interest amount to capitalize? Interest to capitalize $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Biotyme Corporation began constructing a new plant facility in 2025. The building is expected to be completed on October 1, 2025. 2025 payments to the contractor are $200,000 on January 4, $300,000 on April 1, $350,000 on July 1 and $120,000 on September 1. Biotech has secured a construction loan of $500,000 at 5% interest on January 4, 2025. Biotyme has no other debt outstanding. What is the interest amount to capitalize?
Klutlan Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to fund construction. Klutlan does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $2,000,000, 8% note $8,000,000, 5% bonds Construction expenditures incurred were as follows: July 1, 2018 $520,000 September 30, 2018 600,000 November 30, 2018 600,000 January 30, 2019 540,000 The company's fiscal year-end is December 31. Question The total value of the warehouse at the end of construction would be: a $2,288,000 b $2,317,702 c $1,745,760 d $2,260,000
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