Assume that the project in E11 8 was not completed #3097

Assume that the project in E11- 8 was not completed in Year 1. Yawyag was required to make
two additional payments to the contractor in Year 2: $ 900,000 on April 1 and $ 1,800,000 on
August 1 of Year 2. On January 2 of Year 2, Yawyag was required to take out a $ 2,400,000,
9% line of credit to help finance its operating cycle. The plant was completed on October
1.Requireda. Compute the weighted- average accumulated expenditures for the current year. b.
Compute the amount of avoidable interest and actual interest cost for the current year. c.
Indicate the amount of total interest to be capitalized and the amount of interest to expense for
the year.d. Prepare the journal entry to record the December 31 interest payments. Assume that
the interest is paid in cash and that any interest capitalized is recorded in the Construction in
Progress account.In ExerciseDate AmountJanuary 2 ………………………. $ 2,400,000August ……………
1 1,800,000October ………………………… 1 3,600,000December………………………. 1 1,200,000View
Assume that the project in E11 8 was not completed

ANSWER
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