Company A had a storage building constructed for its own use during 2018. The building was completed in October 1. Total expenditures on the building were $3,500,000 and the weighted-average-accumulated expenditures were $2,400,000. To help finance the construction Company A took out a construction loan of $1,500,000. This loan carried a 5% interest rate. Company A's other construction loan includes a $1,000,000, 6% notes payable and $3,000,000 of 8% bonds.

A) Determine the amount of interest Company A should capitalize on the building. (round interest rates to three decimal places, e.g. X.X%)

B) Assuming the building is expected to have a 20-year life and a salvage value, compute straight-line depreciation for 2019.

Answer rating: 100% (QA)

A To determine the amount of interest that Company A should capitalize on the building we need to ca... View the full answer