Hilary Corp. contracted with a company to build a storage warehouse in Year 1 . Construction began
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Question:
Hilary Corp. contracted with a company to build a storage warehouse in Year Construction began on April at which time Hilary Corp. paid $ Hilary Corp. then made additional payments as follows, based on progress made towards completion of the structure:
June $
September $
December $
Hilary Corp. borrowed $ on January specifically for this project at interest. Hilary had the following nonspecific borrowings ie general borrowings outstanding during the year:
$ million loan
$ loan
a How much interest should be capitalized on this building?
b What is the amount of interest expense that will appear on Hilarys Year income statement?
c include Journal Entries
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