During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $9,800,000. The company had the following debt outstanding at December 31, 2020:

1. 10%, 5-year note to finance construction of various assets, dated January 1, 2020, with interest payable annually on January 1 $6,300,000

2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 7,000,000

3. 9%, 3-year note payable, dated January 1, 2019, with interest payable annually on January 1 3,500,000

Instructions - 

Compute the amounts of each of the following (show computations).

1. Avoidable interest.

2. Total interest to be capitalized during 2020.

Answer rating: 100% (QA)

1 Avoidable interest 1015000 Explanation Weighted average accumulated expendit... View the full answer