Current Attempt in Progress Bonita Furniture started construction of a combination office and warehouse building for...
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Current Attempt in Progress Bonita Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,060,000 on January 1, 2022. Bonita expected to complete the building by December 31, 2022. Bonita has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2021 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026 (a) €1,630,000 Borrowing costs € 1,304,000 815,000 Assume that Bonita completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,238,000. The following expenditures were made during the period forthis project: January 1, €815,000; April 1, €1.215,000; July 1, €1.615,000; and October 1, €540,000. Excess funds from the construction loans were invested during the period and earned €16,600 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, eg. 5,275) Current Attempt in Progress Bonita Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,060,000 on January 1, 2022. Bonita expected to complete the building by December 31, 2022. Bonita has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2021 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026 (a) €1,630,000 Borrowing costs € 1,304,000 815,000 Assume that Bonita completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,238,000. The following expenditures were made during the period forthis project: January 1, €815,000; April 1, €1.215,000; July 1, €1.615,000; and October 1, €540,000. Excess funds from the construction loans were invested during the period and earned €16,600 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, eg. 5,275)
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Answer rating: 100% (QA)
Average Accumulated expenses Jan01 8150001212 Apr01 1215000912 Jul01 16... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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