On December 31, 2013, Jumble Inc. borrowed $1,000,000 at 10% payable annually to finance the construction of
Question:
1. Other debt outstanding
10-year, 8% bond dated December 31, 2012, interest payable annually.....$10,000,000
15-year, 10% note dated December 31, 2009, interest payable annually....$2,500,000
2. Interest revenue earned in 2014......................$6,000
Instructions
(a) Determine the amount of interest to be capitalized in 2014 in relation to the construction of the building.
(b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2014.
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Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
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