B17 Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you fx B 1 Problem #1 Interest Capitalization (25 points) Part A, B. & C Houston Co is constructing a building for its own use. Construction began on 7/1/2021 and finished on 9/30/2022. Houston Co's fiscal year ends on December 31st. Houston Co made the following payments to the construction company during 2021 and 2022. 7/1/21 10/1/21 12/1/21 $500 $800 $300 4/1/22 $600 9/30/22 $400 11 On 7/1/2021, Houston Co took out a construction loan of $1,200 at an interest rate of 6%. 13 They had two other general debt borrowings outstanding for all of 2021 and 2022: 15 16 1) $700, 8-year note, borrowed at 5%, and 2) $900, 5-year note, borrowed at 7%, 18 Round all calculations to the nearest whole dollar and interest rates to X.X% (9.2%). 19 20 A. Calculate the amount of interest expense that will appear in the 2021 income statement (yr 1). 21 22 23 24 25 26 27 28 29 30 31 32 33 34 B. Calculate the amount of interest that Boston Co should capitalize in 2022 (year 2). 35 36 37 38 39 40 41 42 Problem 3 What is the final capitalized cost of the building? Ready Problem 1 Problem 2 Type here to search 100 E