Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March
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Question:
Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period
$3,000,000, 8% note | |
$5,000,000, 4% bonds | |
Construction expenditures incurred were as follows: |
July 1, 2016 | $ | 660,000 | |
September 30, 2016 | 930,000 | ||
November 30, 2016 | 930,000 | ||
January 30, 2017 | 870,000 | ||
The company’s fiscal year-end is December 31. |
Required:
Calculate the amount of interest capitalized for 2016 and 2017. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%)
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
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