Calculate the weighted-average capitalization rate on quessa

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Reference no: EM132805706

In February 2019, Quessa Corp. began the construction of a multi-story building. The construction is expected to be completed by January 2020.

During 2019, the following payments were made:

May 1: $2,000,000

July 1: $3,000,000

Sept 1: $1,800,000

Nov 1: $1,900,000

No asset specific debt was incurred.

During 2019, Quessa's general debt consisted of the following:

$4,000,000, 4%, 3-year note,

$2,400,000, 5.5%, 2-year note,

$1,500,000, 3.8%, 4-year note.

Required:

Problem a) Calculate the weighted-average accumulated expenditures for the year ended December 31, 2019.

Problem b) Calculate the weighted-average capitalization rate on Quessa's general-purpose debt for the year ended December 31, 2019.

Problem c) Calculate the avoidable borrowing costs.

Problem d) Calculate the amount of Quessa's borrowing costs that should be capitalized.

Reference no: EM132805706

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