Agasse Industries began construction of a new facility and took out a $1,500,000, 12% construction loan...
Agasse Industries began construction of a new facility and took out a $1,500,000, 12% construction loan on April 1, 2021. Agasse made payments to the general contractor of $337,000 on April 1, $837,000 on August 31, and $437,000 on December 31.
Required: figure the amount of interest that Agasse would capitalize in 2021. (Do not round intermediate calculations.)
Homework Answers
| Payment on April 1 (337,000*9/12) | 252,750 |
| Payment on August 31 (837,000*4/12) | 279,000 |
| Average accumulated expenditures | 531,750 |
Interest to he capitalized in 2021
= 531,750*12%
= 63,810
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