On january $1,2023$ lynwood company began construction of a new plant. The plant was finished and ready for use on septemeber $30,2024.$ Expenditures for the construction were as follow:

Jan $12023-$ $$200,000$

Aug $12023-$ $$600,000$

Dec $12023-$ $$300,000$

March $312024-$ $$500,000$

Sep $302024-$ $$350,000$

Lynwood company borrowed $$800,000$ on construction loan for the project at $10\%$ interest on Jan. $1,2023.$ This loan was outstanding during the construction period. The company also had $$3,000,000$ in $8\%$ bonds and $$1,000,000$ in $12\%$ loans outstanding in both $2023$ and $2024.$

Required: Compute the amounts of each of the following.

a$)$ avoidable interest and interest to be capitalized for $2023$

b$)$ avoidable interest and interest to be capitalized for $2024.$

Answer rating: 100% (QA)

To compute the amounts of avoidable interest and interest to be capitalized for 2023 and 2024 we nee... View the full answer