Please demonstrate the steps$/$calculation taken t o inquire the answer.

To finance construction of the building, a $$612,000,12\%$ construction loan was taken out on February $1.$ At the beginning of the

project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $$4,900.$

The loan was repaid on November $1$ when the construction was completed. The firm had $$191,000$ of other outstanding debt during

the year at a borrowing rate of $11\%$ and a $$199,000$ loan payable outstanding at a borrowing rate of $8\%.(C)$

What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset $3?$ Use Excel or a

financial calculator to arrive at your answer. $($Round final answer to $3$ decimal places, e$.$g$.1\mathrm{.}234\%.)$

Effective interest rate

$\%$

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List of Accounts

Attempts: $0$ of $3$ used Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year

using a variety of financing alternatives.

Assets $1$ and $2$

These assets were purchased together for $$116,000$ cash. The following information was gathered:

Asset $3$

This machine was acquired by making a $$9,000$ down payment and issuing a $$30,500,$ two$-$year, zero$-$interest$-$bearing note. The note is

to be paid off in two $$15,250$ instalments made at the end of the first and second years. It was determined that the asset could have

been purchased outright for $$34,600.$

Asset $4$

A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more

comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts

concerning the trade$-$in are as follows:

Cost of truck traded

Accumulated depreciation to date of exchange

Fair market value of truck traded

Cash paid by Blossom

Fair market value of truck acquired

$$108,000$

$35,000$

$80,000$

$7,000$

$87,000$

Asset $5$

Equipment was acquired by issuing $120$ common shares. The shares are actively traded and had a closing market price a few days

before the equipment was acquired of $$11$ per share. Alternatively, the equipment could have been purchased for a cash price of

$$1,295.$

Construction of Building

A building was constructed on land that was purchased January $1$ at a cost of $$156,000.$ Construction began on February $1$ and was

rompleted November $1.$ The payments to the rontractor were as follows:MENTOON LIBRARY LE $200$NING COMMUNS $602$ ALD DIGGING DEEPER FINANCE CHAPTER IO ad bonust Property, Plant, and Equipment: Accounting Model Basics $($c$)$ From the perspective of a potential investor, what are the financial statement effects of capitalizing borrowing costs related to qualifying assets? $($LO $2,*$E$10-5($Asset Acquisition$)$ Hayes Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. $3,9)000,6112$ Srp dar $($d$)$ What effects, if any, will the recording of purchases to an incorrect account $($land$,$ building, machinery, or any other property, plant, and equipment asset$)$ have on the financial statements? Provide an example.or Jepanuods$)000$ Asset $4$ Assets $1$ and $2$ soud snorkes you to beszil $100$ These assets were purchased together for $$100,000$ cash. The following information was gathered: Description Machinery Office Equipment DOAR $000.$er $000,00$ ODE.I $00\%./$UND anco vanidosm Initial Cost on Seller's Book