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San Diego State University Operations And Supply Chain Management Assignment Help - Depreciation

Question - Capitalization of Interest McPherson Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2010. McPherson expected to complete the building by December 31, 2010. McPherson has the following debt obligations outstanding during the construction period. Construction loan—12% interest, payable semiannually, issued December 31, 2009 $2,000,000 Short-term loan—10% interest, payable monthly, and principal payable at maturity on May 30, 2011 1,600,000 Long-term loan—11% interest, payable on January 1 of each year. Principal payable on January 1, 2014 1,000,000 (Carry all computations to two decimal places.) (a) Assume th ...Read More

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