Question

Exercise 10-9 (Part Level Submission) On July 31, 2017, Whispering Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Whispering issued a $301,200, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $195,200 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Whispering made a final $106,000 payment to Minsk. Other than the note to Netherlands, Whispering’s only outstanding liability at December 31, 2017, is a $30,300, 8%, 6-year note payable, dated January 1, 2014, on which interest is payable each December 31. Collapse question part (a) Correct answer. Your answer is correct. Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2017. Interest revenue $Entry field with correct answer 2650 Weighted-average accumulated expenditures $Entry field with correct answer 48800 Avoidable interest $Entry field with correct answer 5856 Interest capitalized $Entry field with correct answer 5856 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT Attempts: 3 of 5 used Collapse question part (b) Prepare the journal entries needed on the books of Whispering Company at each of the following dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) July 31, 2017. (2) November 1, 2017. (3) December 31, 2017. Date Account Titles and Explanation Debit Credit cash 301200 Notes Payable 301200 (To record the note.) Notes Payable Cash (To record the payment to Minsk.) (To record the proceeds from the investment.) (To record the payment to Minsk.) 12/31

Answer 1

Part B

No.	date	account titles and explanation	debit	credit
1	7/31	cash	301200
		Notes Payable		3012003
		Machine	195200
		Trading securities	106000
		Cash		301200
2	11/1	cash	108650
		Interest revenue (106000*10%*3/12)		2650
		Trading securities		106000
		Machine	106000
		Cash		106000
3	12/31	machine	5856
		Interest expense (2424+15060-5856)	11628
		Cash (30300*8%)		2424
		Interest payable (301200*12%*5/12)		15060