Company A is planning to instruct a building at estimated cost of 500,000 $ and takes...

 

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Company "A" is planning to instruct a building at estimated cost of 500,000 $ and takes 3 years for the building to be ready for its intended use. The company actually start for building in 15/1/2018 and the company got in 16/6/2018 bank loan at amount 500,000$ with annually interest rate 10%. The following payments for instructed building during the first year: 1/5/2018 1/7/2018 30,000 20,000 1/4/2018 50,000 The above payments are covered by the bank loan.. 13- What is the amount of interest expense that should be capitalized in 2018? Company "A" is planning to instruct a building at estimated cost of 500,000 $ and takes 3 years for the building to be ready for its intended use. The company actually start for building in 15/1/2018 and the company got in 16/6/2018 bank loan at amount 500,000$ with annually interest rate 10%. The following payments for instructed building during the first year: 1/5/2018 1/7/2018 30,000 20,000 1/4/2018 50,000 The above payments are covered by the bank loan.. 13- What is the amount of interest expense that should be capitalized in 2018?

Answer rating: 100% (QA)

Solution To calculate the amount of interest expense that should be capitalized in 2018 we need to follow the capitalization rules as per the Generally Accepted Accounting Principles GAAP and the spec... View the full answer