Reference no: EM133093076

Question - Sunrise Corp is constructing a coffee shop. Construction began on 2/1/19 and the coffee shop was completed 12/31/19. Sunrise made payments to the construction company of $300,000 on 7/1, $580,000 on 9/1, and $210,000 on 10/1.

Sunrise Corp took out a loan to help pay for this construction on 6/1/19 for $681,000 of which the principle and interest is all due on 3/1/20. The loan has an interest rate of 8%.

Other loans that Sunrise has include 1) $405,000 5-year loan with a 4% interest that started 1/1/19 and 2) $241,000 3-year loan with a 7% interest that started 1/1/20.

1. Determine the maximum weighted average accumulated construction expenses that can be capitalized for 2019?

2. Determine the amount of interest expense that is capitalized for 2019?

3. Determine the balance of the interest expense account as of 12/31/19 after all adjustments were made?

4. Determine the balance of the building under construction account as of 12/31/19 after all adjustments have been made.