Question: On June 1 , 2 0 2 3 , a company began construction of a new manufacturing plant. The plant was completed on October 3

On June 1,2023, a company began construction of a new manufacturing plant. The plant was completed on October 31,2024. Expenditures on the project were as follows ($ in millions):
July 1,202388
October 1,202356
February 1,202464
April 1,202438
September 1,202437
October 1,202423
On July 1,2023, the company obtained a $104 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2024. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 10%. This note was outstanding during all of 2023 and 2024. The company's fiscal year-end is December 31.
What is the amount of interest that should be capitalized in 2023, using the specific interest method?
Multiple Choice
$4.59 million
$4.64 million
$5.65 million
None of the other answer choices are correct

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!