During 2015 J & J completed the construction of a new warehouse in the North Carolina. Construction began on January 1, 2014. The cost of the new warehouse was $3M with the cost incurred evenly throughout the construction. The following information is provided: J & J incremental interest rate is 8% Actual interest incurred during 2015 was $135,000. The average accumulated expenditures was $1,5M Requirement:
a. How much interest should be calculated?
b. What is the entry to capitalize the interest?
During 2015 J & J completed the construction of a new warehouse in the North Carolina. Construction began on January 1, 2014. The cost of the new warehouse was $3M with the cost incurred evenly throughout the construction. The following information is provided: J & J incremental interest rate is 8% Actual interest incurred during 2015 was $135,000. The average accumulated expenditures was $1,5M Requirement:
a. How much interest should be calculated?
b. What is the entry to capitalize the interest?
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January 1, 2018 | $ | 200,000 | |
September 1, 2018 | $ | 300,000 | |
December 31, 2018 | $ | 300,000 | |
March 31, 2019 | $ | 300,000 | |
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January 1, 2018 | $ | 323,000 | |
September 1, 2018 | $ | 483,000 | |
December 31, 2018 | $ | 483,000 | |
March 31, 2019 | $ | 483,000 | |
September 30, 2019 | $ | 323,000 | |
Dreamworld had $6,100,000 in 15% bonds outstanding through both years.
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a. $84,712
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