The following information is from Bowin Inc. for a long-term construction project that is expected to...
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The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in january 2021. The construction project is for a building intended for the company's own use. The capital expenditure on January 1, 2020, is for the purchase of land for the bullding site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Amount Jan. 1, 2020 S 30,000 Mar. 31, 2020 900,000 June 30, 2020 1,800,000 Nov. 30, 2020 900,000 Outstanding Debt in 2020 Debt Debt Amount Interest Rate Note payable $1,000,000 Nate payable B00,000 396 Bond payable 2,000,000 10% Note payable 500,000 Answer the following questions: a. Compute interest to be capitalized and the interest to be expensed in 2020. b. Prepare the entry to record the construction expenditures and interest for 2020. C Prepare the entry for depreciation in 2021 assuming that the project is completed on January 1, 2021. Assume that the building has a useful life of 30 years, and that the company uses the straight-line depreciation method. Note: Do not round until your final answers, then round to nearest whole number. a. Amount of interest to be capitaolized 5 151,981 Amount of interest to expense 237,019 Account Name Dr. Cr. Land 30,000 Construction in Process Cesh and Peyebles Account Name Dr. Cr. OOOO The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in january 2021. The construction project is for a building intended for the company's own use. The capital expenditure on January 1, 2020, is for the purchase of land for the bullding site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Amount Jan. 1, 2020 S 30,000 Mar. 31, 2020 900,000 June 30, 2020 1,800,000 Nov. 30, 2020 900,000 Outstanding Debt in 2020 Debt Debt Amount Interest Rate Note payable $1,000,000 Nate payable B00,000 396 Bond payable 2,000,000 10% Note payable 500,000 Answer the following questions: a. Compute interest to be capitalized and the interest to be expensed in 2020. b. Prepare the entry to record the construction expenditures and interest for 2020. C Prepare the entry for depreciation in 2021 assuming that the project is completed on January 1, 2021. Assume that the building has a useful life of 30 years, and that the company uses the straight-line depreciation method. Note: Do not round until your final answers, then round to nearest whole number. a. Amount of interest to be capitaolized 5 151,981 Amount of interest to expense 237,019 Account Name Dr. Cr. Land 30,000 Construction in Process Cesh and Peyebles Account Name Dr. Cr. OOOO
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a Weighted average accumulated expenditure Date Amount Period till the end of year Weighted average ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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