Problem $1$

Alpha Company is constructing a building. Alpha began its construction on January $1$ and completed construction on December $31.$ Alpha had the following expenditures related to construction: $\backslash (\backslash$$ $6,400,000\backslash )$ on March $1,\backslash$$$5,280,000$ on June $1,$ and $\backslash$$$8,000,000$ on December $31.$ Alpha Company borrowed $\backslash$$$3,200,000$ on January $1$ on a $5-$year, $\backslash (12\backslash \%\backslash )$ note to help finance the construction of the building. Alpha already had outstanding all year a $10\backslash \%,3-$year, $\backslash (\backslash$$ $6,400,000\backslash )$ note payable and an $11\backslash \%,4-$year, $\backslash (\backslash$$ $12,000,000\backslash )$ note payable.

a$)$ What were weighted$-$average accumulated expenditures for the year?

b$)$ What weighted$-$average interest rate should Alpha use to determine the interest to be capitalized?

Weighted$-$Average Interest Rate:

c$)$ What is the avoidable interest for Alpha Company for the year?

d$)$ What is the actual interest for Alpha Company for the year?

e$)$ How much interest will Alpha Company capitalize? Problem $2$

Beta Company exchanged machinery with Gamma Corporation for machinery Gamma owns. The following is provided for each company's assets in the exchange:

Gamma also gave Beta $\backslash$$$24,000$ in the exchange. Assume depreciation has already been updated.

Prepare the entries on both companies' books assuming the exchange had commercial substance.

Prepare the entries on both companies' books assuming the exchange lacked commercial substance. Problem $3$

The Delta Corporation is disposing of a piece of equipment on May $1,2025.$ The equipment had an original cost of $\backslash (\backslash$$ $400,000\backslash )$ when purchased on January $1,2021.$ Accumulated depreciation as of $12/31/2024$ was $\backslash (\backslash$$ $160,000\backslash )$ assuming straight$-$line depreciation over a useful life of $10$ years with no salvage value. Delta received $\backslash (\backslash$$ $250,000\backslash )$ on the sale of the equipment. Record the necessary entries for the sale.