Business, 11.12.2019 22:31 tatipop49

On january 1, 2018, the company obtained a $3 million construction loan with a 10% interest rate. the loan was outstanding all of 2018 and 2019. the company’s other interest-bearing debt included two long-term notes of $5,900,000 and $7,900,000 with interest rates of 7% and 9%, respectively. both notes were outstanding during all of 2018 and 2019. interest is paid annually on all debt. the company’s fiscal year-end is december 31. assume the $3 million loan is not specifically tied to construction of the building. required:
1. calculate the amount of interest that mason should capitalize in 2018 and 2019 using the weighted-average method.
2. what is the total cost of the building?
3. calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.

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On january 1, 2018, the company obtained a $3 million construction loan with a 10% interest rate. th...

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