On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building wascompleted in 2025. The company borrowed $2,200,000 at 8% on January 1 to help finance the construction in addition to theconstruction loan, Highlands had the following debt outstanding throughout 2024$9,000,000, 10% bonds$6,000,000, 8% long-term noteConstruction expenditures incurred during 2024 were as followsJanuary 1March 31June 30September 30December 31Date$ 900,0001,500,0001,160,000Required:Calculate the amount of interest capitalized for 2024 using the specific interest methodNote: Do not round the Intermediate calculations, Round your percentage answers to 1 decimal place (l.e. 0.123 should be enterees 12.3%).January 1March 31June 30September 30December 31Accumulated expenditure900,000700,000Expenditure$Average accumulated expenditures SAmount00XxXXXxXWeightInterestRate%6%=====AverageSCapitalizedInterestSS0000< Prev4 of 5Neli>

When interest is capitalized, the cost of building or purchasing a particular asset is included in…

On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025 The company borrowed $2,200,000 at 8% on January 1 to help finance the construction in addition to the construction loan, Highlands had the following debt outstanding throughout 2024 $9,000,000, 10% bonds $6,000,000, 8%, long term note Construction expenditures incurred during 2024 were as follows January 1 March 31 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method Note: Do not round the Intermediate calculations. Round your percentage answers to 1 decimal place (1.e. 0.123 should be entered es 12.3%). Date $ 900,000 1,500,000 1,160,000 900,000 700,000 January 1 March 31 June 30 September 30 December 31 Accumulated expenditure Expenditure S Average accumulated expenditures S Amount 0 0 X X X x Weight Interest Rate = m = M = = Average S Capitalized Interest S S 0 0 0 0 Prev # Nehm

On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025 The company borrowed $2,200,000 at 8% on January 1 to help finance the construction in addition to the construction loan, Highlands had the following debt outstanding throughout 2024 $9,000,000, 10% bonds $6,000,000, 8%, long term note Construction expenditures incurred during 2024 were as follows January 1 March 31 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method Note: Do not round the Intermediate calculations. Round your percentage answers to 1 decimal place (1.e. 0.123 should be entered es 12.3%). Date $ 900,000 1,500,000 1,160,000 900,000 700,000 January 1 March 31 June 30 September 30 December 31 Accumulated expenditure Expenditure S Average accumulated expenditures S Amount 0 0 X X X x Weight Interest Rate = m = M = = Average S Capitalized Interest S S 0 0 0 0 Prev # Nehm

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 6PB

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.
Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued 15,000,000 of 20-year, 9% callable bonds on May 1, 2016 at their face amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions: 2016 May 1. Issued the bonds for cash at their face amount. Nov. 1. Paid the interest on the bonds. 2022 Nov. 1. Called the bond issue at 96, the rate provided in the bond indenture. (Omit entry for payment of interest.)
Thornton 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. Thornton does have the following two interest-bearingliabilities that were outstanding throughout the construction period:$2,000,000, 8% note$8,000,000, 4% bondsConstruction expenditures incurred were as follows:July 1, 2018 $400,000September 30, 2018 600,000November 30, 2018 600,000January 30, 2019 540,000The company’s fiscal year-end is December 31.Required:Calculate the amount of interest capitalized for 2018 and 2019.
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On January 1, 2014, ENERVATE TO WEAKEN Company had the following borrowings made for general purposes and a part of the proceeds was used to finance the construction of a qualifying asset. 12% short-term note-P40,000,000 14% bank loan (3-year)- 72,000,000 16% note payable (5-year)- 88,000,000 The construction of the qualifying asset was started on immediately and completed on June 30, 2015 and expenditures incurred on the qualifying asset were as follows: Jan. 1 P19,200,000 Mar. 31 8,800,000 July 30 14,000,000 March 31 21,600,000 June 30 1,200,000 How much is the cost of the new constructed building?
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On December 31, 2024, L Incorporated had a $3,000,000 note payable outstanding, due July 31, 2025. L borrowed the money to finance construction of a new plant. L planned to refinance the note by issuing long-term bonds. Because L temporarily had excess cash, it prepaid $650,000 of the note on January 23, 2025. In February 2025, L completed a $4,500,000 bond offering. L will use the bond offering proceeds to repay the note payable at its maturity and to pay construction costs during 2025. On March 13, 2025, L issued its 2024 financial statements. What amount of the note payable should L include in the current liabilities section of its December 31, 2024, balance sheet? Multiple Choice A. $0 B. $650,000 C. $2,350,000 D. $3,000,000 Please don't provide answer in image format thank you
30. Dear company has a 2,400,000 note payable due June 30, 2019. On December 31, 2018, the entity signed an agreement to borrow up to 2,400,000 to refinance the note payable on a long term basis. The financing agreement called for borrowing not to exceed 80% of the value of the collateral the entity was providing. On December 31, 2018, the value of the collateral was 1,800,000. On December 31, 2018, what amount of the note payable should be reported as current liabilities?