Interest+Capitalization+Answer

Interest+Capitalization+Answer - 1/1/09 3,600,000 +...

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2008: Actual Interest for the year = 3,200,000 x .09 = $288,000 750,000 x .12 = 90,000 $378,000 Weighted-average accumulated expenditures: 6/1/08 3,600,000 x 7/12 = 2,100,000 8/31/08 5,400,000 x 4/12 = 1,800,000 $3,900,000 Capitalized Interest = 3,200,000 x .09 = $288,000 700,000 x .12 = 84,000 $372,000 $3,200,000 in specific borrowings and $700,000 remainder in borrowings to reach weighted-average accumulated expenditures. 2009: Actual Interest for the year = 3,200,000 x .09 = $288,000 750,000 x .12 = 90,000 $378,000 Weighted-Average accumulated expenditures:
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Unformatted text preview: 1/1/09 3,600,000 + 5,400,000 + 372,000 = $9,372,000 9,372,000 x 3/3 = 9,372,000 3/1/09 4,500,000 x 1/3 = 1,500,000 $10,872,000 Avoidable Interest = 3,200,000 x .09 x 3/12 = $72,000 750,000 x .12 x 3/12 = 22,500 $ 94,500 Also your capitalized interest Rest of expenditures are paid through the stock * When calculating interest, you always multiply by the months left. 2009 Journal Entry would be: Equipment 94,500 Interest Expense 283,500 Interest Payable 378,000...
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