On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:

Question

Question

On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:


January 1, 2021	$	1,170,000
March 1, 2021		840,000
June 30, 2021		1,040,000
October 1, 2021		840,000
January 31, 2022		306,000
April 30, 2022		639,000
August 31, 2022		900,000

On January 1, 2021, the company obtained a $3,000,000 construction loan with a 15% interest rate. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $3,000,000 and $9,000,000 with interest rates of 9% and 13%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

1 & 3. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method and interest expense that will appear in the 2021 and 2022 income statements. (Do not round intermediate calculations.)

2. What is the total cost of the building? (Do not round intermediate calculations.)

accounting

Add a comment Improve this question Transcribed image text

Answer 1

On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:

Homework Answers

Request Answer!

Add Answer to:
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:

Post as a guest

Earn Coins

On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the...