During 2020, Kimmel Co. incurred weighted-average accumulated expenditures of $1,600,000 during construction of assets that qualified for capitalization of interest. The only debt outstanding during 2020 was a $2,000,000, 10%, 5-year note payable dated January 1, 2020. What is the amount of interest that should be capitalized by Kimmel during 2020?

Respuesta :

Answer:

The amount of interest that should be capitalized by Kimmel during 2020: $ 160,000

Explanation:

Formula to be considered to calculate the interest to be capitalized = accumulated expenditures * interest rate.

Interest to be capitalized = $ 1,600,000 x 10% = $ 160,000

ACCESS MORE