During 2025, Crane Company constructed assets costing $4070000. The weighted-average accumulated expenditures on these assets during 2025 was $2410000. To help pay for construction, $1720000 was borrowed at 10% on January 1, 2025, and funds not needed for construction were temporarily invested in short-term securities, yielding $35000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $1970000, 10-year, 9% note payable dated January 1, 2019. Interest is payable on both notes at December 31, 2025. What is the amount of interest that should be capitalized by Crane during 2025?

During 2025, Crane Company constructed assets costing $4070000. The weighted-average accumulated expenditures on these assets during 2025 was $2410000. To help pay for construction, $1720000 was borrowed at 10% on January 1, 2025, and funds not needed for construction were temporarily invested in short-term securities, yielding $35000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $1970000, 10-year, 9% note payable dated January 1, 2019. Interest is payable on both notes at December 31, 2025. What is the amount of interest that should be capitalized by Crane during 2025?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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