Details of this Paper

Accounting Two Exercises

Description

solution


Question

Question;Exercise 10-?8On December 31, 2011, Hurston Inc. borrowed $6,390,000 at 13% payable annually to finance the construction of anew building. In 2012, the company made the following expenditures related to this building: March 1, $766,800, June1, $1,278,000, July 1, $3,195,000, December 1, $2,556,000. Additional information is provided as follows.1. Other debt outstanding10?year, 12% bond, December 31, 2005, interest payableannually6?year, 11% note, dated December 31, 2009, interest payableannually2. March 1, 2012, expenditure included land costs of $319,5003. Interest revenue earned in 2012$8,520,000$3,408,000$104,370(a) Determine the amount of interest to be capitalized in 2012 in relation to the construction of the building.The amount of interest$(b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, atDecember 31, 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditExercise 10?17Alatorre Corporation, which manufactures shoes, hired a recent college graduate to work in its accountingdepartment. On the first day of work, the accountant was assigned to total a batch of invoices with the use of anadding machine. Before long, the accountant, who had never before seen such a machine, managed to break themachine. Alatorre Corporation gave the machine plus $497 to Mills Business Machine Company (dealer) in exchangefor a new machine. Assume the following information about the machines.Alatorre Corp.Mills Co.(Old Machine)(New Machine)Machine cost$451$420Accumulated depreciation218?0?Fair value132629For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercialsubstance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationAlatorre CorporationDebitCreditMills Business Machine Company

 

Paper#43694 | Written in 18-Jul-2015

Price : $25
SiteLock