Reference no: EM132537305
Question - JayCo began construction on a building during the operating year just ended. The following facts apply:
Expected total cost of constructing the building $5,500,000
Expended during this year January 3 $ 400,000
April 1 $ 500,000
August 1 $ 500,000
November 1 $ 1,000,000
December 31 $ 250,000
JayCo borrowed, on April 1, $750,000 at 3.5% interest, to help finance the construction.
JayCo also had the following additional debt outstanding the entire year:
$2,500,000 long term debt due in 4 years at an interest rate of 4%
$1,400,000 long term debt due in 2 years at an interest rate of 5%
Required -
a. Compute the weighted average expenditures for this construction for the current year.
b. Provide the summary entry to record the total actual interest for the current year as a year-end entry.
c. Provide the entry to transfer the appropriate amount of capitalized interest to the building account.
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: JayCo borrowed, on April 1, $750,000 at 3.5% interest, to help finance the construction. Compute the weighted average expenditures for this construction
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