Business, 05.05.2020 09:23 onlyceleste212

On December 31, 2019, Waterway Inc. borrowed $4,320,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $518,400; June 1, $864,000; July 1, $2,160,000; December 1, $2,160,000. The building was completed in February 2021. Additional information is provided as follows.

1. Other debt outstanding 1
0-year, 14% bond, December 31, 2013, interest payable annually $5,760,000
6-year, 11% note, dated December 31, 2017, interest payable annually $2,304,000
2. March 1, 2020, expenditure included land costs of $216,000
3. Interest revenue earned in 2020.

Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.

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On December 31, 2019, Waterway Inc. borrowed $4,320,000 at 13% payable annually to finance the const...

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