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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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