On December 31, 2024, Vaughn Inc. borrowed $3,900,000 at 12% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $468,000; June 1, $780,000, July 1, $1,950,000; December 1, $1,950,000. The building was completed in February 2026. Additional information is provided as follows. 1. Other debt outstanding: 10-year, 13% bond, December 31, 2018, interest payable annually 6-year, 10% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $195,000. 2 3. Interest revenue of $63,700 earned in 2025. $5,200,000 2,080,000

On December 31, 2024, Vaughn Inc. borrowed $3,900,000 at 12% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $468,000; June 1, $780,000, July 1, $1,950,000; December 1, $1,950,000. The building was completed in February 2026. Additional information is provided as follows. 1. Other debt outstanding: 10-year, 13% bond, December 31, 2018, interest payable annually 6-year, 10% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $195,000. 2 3. Interest revenue of $63,700 earned in 2025. $5,200,000 2,080,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 43P

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