![Exercise 10-24 (Algo) Interest capitalization [LO10-7]<br>On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was<br>completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the<br>construction loan, Highlands had the following debt outstanding throughout 2021:<br>$8,000,000, 14% bonds<br>$2,000,000, 9% long-term note<br>Construction expenditures incurred during 2021 were as follows:<br>$ 880,000<br>1,480,000<br>1,136,000<br>880,000<br>680,000<br>January 1<br>March 31<br>June 30<br>September 30<br>December 31<br>Required:<br>Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations.<br>Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)<br>X Answer is not complete.<br>Date<br>Expenditure<br>Weight<br>Average<br>January 1<br>2$<br>880,000<br>12/12<br>$<br>880,000<br>March 31<br>1,480,000 x<br>9/12 O =<br>111,000 X<br>June 30<br>1,136,000 x<br>6/12 O<br>568,000<br>000 00<br>](https://s3.us-east-1.amazonaws.com/storage.unifolks.com/qimg-008/008_wtulzj0-4jhwsemk.jpeg)
Extracted text: Exercise 10-24 (Algo) Interest capitalization [LO10-7] On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: $ 880,000 1,480,000 1,136,000 880,000 680,000 January 1 March 31 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) X Answer is not complete. Date Expenditure Weight Average January 1 2$ 880,000 12/12 $ 880,000 March 31 1,480,000 x 9/12 O = 111,000 X June 30 1,136,000 x 6/12 O 568,000 000 00
Extracted text: Construction expenditures incurred during 2021 were as follows: January 1 March 31 000 088 1,480,000 1,136,000 880,000 680,000 June 30 September 30 December 31 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) Answer is not complete. Date Expenditure Weight Average January 1 $ 880,000 O x 12/12 O = $ 880,000 March 31 1,480,000 O x 9/12 111,000 June 30 1,136,000 O x 6/12 O 568,000 September 30 880,000 3/12 O 220,000 December 31 680,000 0/12 O= Accumulated expenditure $ 5,056,000 $ 1,779,000 Capitalized Interest Amount Interest Rate Average accumulated expenditures $1,779,000 Construction loan 2,150,000 0. All loans 7.0 X %