Solution-Compute the amount of interest costs capitalized

Compute the amount of interest costs capitalized each year

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Reference no: EM132766004

Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available:

Capitalization period: January 1, 2019, to June 30, 2020

Expenditures on project:
2019:

January 1 $ 540,000
May 1 $465,000
October 1 $ 600,000

2020:

March 1 $1,500,000
June 30 $600,000

Amounts borrowed and outstanding:

$1.5 million borrowed at 12%, specifically for the project
$6 million borrowed on July 1, 2018, at 14%
$14 million borrowed on January 1, 2017, at 8%

Required:

Problem 1: Compute the amount of interest costs capitalized each year.

Reference no: EM132766004

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Compute the amount of interest costs capitalized each year

Reference no: EM132766004

Reference no: EM132766004

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