On December 31, 2012, PT Hutama Jaya borrowed $1,800,000 at an interest rate of 12% per...

 

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On December 31, 2012, PT Hutama Jaya borrowed $1,800,000 at an interest rate of 12% per annum to finance the construction of its building. In 2013 the company made expenditures related to the development as follows: April 1, 2013 expenses amounted to $1,716,000 May 1, 2013 expenses amounting to $720,000 August 1, 2013 expenses amounting to $900,000 November 1, 2013 expenses amounting to $720,000 During 2013 there were also outstanding loans as follows: - 10 year Bond Loan $ 2,400,000, interest 11%, interest payable every December 31 - 6-year note payable, $960,000, 10% interest, interest payable every December 31 1. Calculate the weighted average accumulated project expenditure in 2013! 2. Calculate the actual interest and avoidable interest in 2013 3. Prepare journal entries to record interest capitalization related to building construction and interest expense (if any) on December 31, 2013! On December 31, 2012, PT Hutama Jaya borrowed $1,800,000 at an interest rate of 12% per annum to finance the construction of its building. In 2013 the company made expenditures related to the development as follows: April 1, 2013 expenses amounted to $1,716,000 May 1, 2013 expenses amounting to $720,000 August 1, 2013 expenses amounting to $900,000 November 1, 2013 expenses amounting to $720,000 During 2013 there were also outstanding loans as follows: - 10 year Bond Loan $ 2,400,000, interest 11%, interest payable every December 31 - 6-year note payable, $960,000, 10% interest, interest payable every December 31 1. Calculate the weighted average accumulated project expenditure in 2013! 2. Calculate the actual interest and avoidable interest in 2013 3. Prepare journal entries to record interest capitalization related to building construction and interest expense (if any) on December 31, 2013!

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