Saved On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. building was completed
Saved On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 $ 1,200,000 660,000 520,000 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 620,000 360,000 675,000 1,080,000 On January 1, 2024, the company obtained a $3 million construction loan with a 11% interest rate. Assume the $3 million loan specifically tied to construction of the building. The loan was outstanding all of 2024 and 2025. The company's other interest debt included two long-term notes of $4,200,000 and $6,200,000 with interest rates of 6% and 8%, respectively. Both notes outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31 Required: Using the weighted-average interest method, answer the following questions: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements. Complete this question by entering your answers in the tabs below. Req 1 and 3 Req 2 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method. 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements. Note: Round "Weighted-average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Ente your answers in dollars rounded to the nearest whole number. 2024 1. Interest capitalized 3. Interest expense 2025 Req Land 3 Req 2 > Show less
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To solve this problem well need to use the weightedaverage interest method to calculate the interest that Mason Manufacturing Company should capitaliz...See step-by-step solutions with expert insights and AI powered tools for academic success
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