Question

On July 31, 2020, Shamrock Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed on November 1, 2020. To help finance construction, on July 31 Shamrock issued a $320,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $228,400 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, Shamrock made a final $92,000 payment to Minsk. Other than the note to Netherlands, Shamrock's only outstanding liability at December 31, 2020, is a $32,900,8%, 6-year note payable, dated January 1, 2017, on which interest is payable each December 31. Calculate the interest revenue, weighted average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020. Interest revenue - Weighted average accumulated expenditures 0 Avoidable interest 0 Interest capitalized 0 e Textbook and Media Assistance Used List of Accounts Save for Later Attempts: 0 of 3 used Submit Answer

and Journal entries for july 31, november 1st and December 31st

please help

Answer 1

Page No 0 Answer @ Interest revenue Interest revenue = (320,400 – 228,400) x 10 % x 3 = 92000 X 10% XM - $ 2300 1:. Interest devenue = $2300 Ceiabted average accumulated Org weighted average accumulated expenditure = July 31 expenditure + Now I expenditüne - (226400 x ) + (93000 x 0) = $57100 aceighted average accumulated expenditure - $ 57100 Avoidable interest Avoidable interest =:57100 X 124. - $6852 Avoidable interest = $6852

Page: No Interest capitalized Fetereof capitaliged - 54100X12.4 = $6852 P. Interest capitalized = $6852 o dec 31 Date Debit Gedit Journal entries Total interest expense - (3304,00* 182. Xe ) + (32960 x 87;) = 16020 + 3632 P.; Jolay (? 5 months = $ 18652 Actual interest expense - 18652 - 6859 = $ 11800 Particular July : Cash $ 320400 2020 127 note payable $320400 Paclory machinery $228,400 Short term investment $92000 cash. $ 320400 $ 94300 Short term investment $92000 Interest revenue $ 2300 -Faching machinery $92000 Cash $92000 Nov | Cash

Page.no Gredit dec 31 Pasiticular factory machinery Interest expense Сах, Interest payable Debit $ 6852 $11800 $ 2632 $16020