Early in 2014, sun company contracted with moon company to design a new manufacturing plant construction began on June 1 ,2014 and was completed on December 31, 2014 , sun made the following payments to moon during 2014 date June 1,2014 6,000,000 august 31 ,2014 9,000,000 December 31 ,2014 7,500,000 in order to help finance the construction, sun issued the following during 2014 5,000,000 of 10-year 9% bonds payable, issued at par on may 31,2014 with interest payable annually on may 31, in addition to the 9% bonds payable the only debt outstanding during 2014 was a 1,260,000 12% note payable dated Jan 1,2010 and due January 1, 2020 with interest payable annually on Jan 1.

Compute the amounts of each of the following:

1. Weighted average accumulated expenditures qualifying for capitalization of interest cost

2. Avoidable interest cost incurred during 2014

3. Total amount of interest cost to be capitalized during 2014.

Answer rating: 100% (QA)

Solution 1 Weightedaverage accumulated expenditures Weightedaverage accumulated expenditures will be ... View the full answer