Question

Sheridan Company borrowed $3200000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13800000 in 9% bonds outstanding in 2020 and 2021. The interest capitalized for 2020 was:

Answer 1

Answer:

$1,594,000

Explanation:

Calculation to determine what The interest capitalized for 2020 was

2020 interest capitalized= $3,200,000* 12%*11/12 + $13,800,000 * 9%

2020 interest capitalized=$352,000+$1,242,000

2020 interest capitalized=$1,594,000

Therefore The interest capitalized for 2020 was $1,594,000