Answer:
Oriole Company
The interest capitalized for 2020 was: ___________-
d. $120660
Explanation:
a) Data and Calculations:
Construction Expenditures:
Date Expenditure Weight Weighted Average
January 2, 2020 $603,000 12/12 $603,000
September 1, 2020 1,810,800 4/12 603,600
December 31, 2020 1,810,800 0/12 0
Accumulated Weighted-Average Expenditure $1,206,600
January 2, 2020 Construction Loan $3,300,000
Interest rate of construction loan = 10%
Capitalized Interest for 2020 = $1,206,600 * 10% = $120,660
2021 Expenditure:
March 31, 2021 1,810,800
September 30, 2021 1,218,000
Other outstanding debts:
7% bonds = $13,560,000
