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costs of $170,000 were incurred to finance the construction.
Determine the cost of the land and the cost of the building as
they should be recorded on the books of Martin Buberk Co.
assumes that the land survey was for the building.
5)
Ben Sisko Supply Company, a newly formed
corporation, incurred the following expenditure related to
land, to Buildings, and to machinery and equipment.
Determine the amounts that should be debited to land, to
buildings, and to machinery and equipment. Assume the
benefits of capitalizing interest during construction exceed the
cost of implementation.
6)
On December 31, 2013, Main Inc. borrowed $3,000,000
at 12% payable annually to finance the construction of a new
building. In 2014, the company made the following
expenditures related to this building: March 1, $360,000; June
1, $600,000;$1,500,000; December 1, $1,500,000. The
building was completed in February 2015. Additional
information is provided as follows.
7)
Determine the amount of interest to be capitalized in
2014 in relation to the construction of the building.
8) Prepare the journal entry to record the capitalization of
interest and the recognition of interest expense, if any, at
December 31, 2014.