Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) On January 1, 2008, Jonathan Company started construction of new building to be used as its office headquarters. Building was finished and ready for use on September 30, 2009.

 

3-Jan-08

$1,000,000

1-Mar-08

600,000

30-Jun-08

800,000

1-Oct-08

600,000

31-Jan-09

270,000

30-Apr-09

585,000

31-Aug-09

900,00

 

Expenditures on construction were:

 

On January 2, 2008, company got a $3,000,000 construction loan with 10% interest rate.  The loan was outstanding all of 2008 and 2009. Company's other interest-bearing debt consisted of two long-term notes of $4,600,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding all of 2008 and 2009. Company's fiscal year end is December 31.

 

a. Compute amount of interest Jonathan should capitalize as part of cost of building in 2008 and 2009.

 

b. Determine the total cost of building?

 

Compute amount of interest expense which will appear on 2008 and 2009 income statements.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M916890

Have any Question? 


Related Questions in Accounting Basics

Problem 1a two four-year-old companies are identical in all

Problem 1: a. Two four-year-old companies are identical in all respects except that Company A has used straight-line depreciation exclusively since inception while Company B has used double-declining balance depreciation ...

Writing assignmentthe writing assignment has to be between

Writing Assignment The writing assignment has to be between 650-700 words. With 2-3 references to follow, one in particular has to be from the book we are studying out of: Intermediate accounting (7th ed.). Spiceland, Se ...

Accounting questioncase scenario japanese gaap vs chinese

Accounting Question: Case scenario: Japanese GAAP vs. Chinese Convergence Research and compare the convergence of China's financial reporting standards with U.S. GAAP or IAS GAAP since 1999 and respond to the following q ...

Analyzing capital expendituresassume that you have received

Analyzing Capital Expenditures Assume that you have received a capital expenditure request for $52,000 for plant equipment and that you are required to do a justification analysis using capital budgeting techniques. The ...

Quantity sold400 units selling price per unit 600 total

Quantity Sold 400 units Selling Price per unit $600 Total variable Costs $160,000 Fixed Costs $50,000 Target Income $90,000 Calculate the following: 1- Contribution margin per unit 2- Total contribution margin 3- Break-e ...

Practice questionskerry melrose has a conference organising

Practice questions: Kerry Melrose has a conference organising business and is thinking of buying some computer-controlled audio visual equipment. She has done her calculations on a cash basis and has discovered that the ...

Oregon corporation has filed a voluntary petition to

Oregon Corporation has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Reform Act. Its creditors are considering an attempt to force liquidation. The company currently holds cash of $13,000 an ...

Problemyou have decided to start a business selling widgets

Problem: You have decided to start a business selling widgets. You form a corporation, Widgets, Inc. You paid $10 per share for 1,000 shares of stock on January 1, 2016. Next the company borrowed $30,000 from your Aunt S ...

Case study assignmentthese notes will guide you in writing

Case study assignment These notes will guide you in writing a business letter to an accounting client. An effective letter meets your receiver's needs. In this case, it answers the client's questions in a clear, accurate ...

Imagine you are a member of the project approval committee

Imagine you are a member of the project approval committee. An ambitious young manager in the marketing department is well connected with the top management team in your company. He catches you in the hall and mentions t ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate