Calculate WAAE and avoidable interest

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Question - On March 1, 2020, AUS Company purchased land for an office site. AUS began construction on the office building on March 1. The following expenditures were incurred for construction:

Date Expenditures

March 1, 2020 $1,800,000

April 1, 2020 2,520,000

July 1, 2020 4,500,000

December 1, 2020 4,800,000

The office was completed and ready for occupancy on December 31. To help pay for construction 3,600,000 was borrowed on March 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $3,500,000, 12%, 6-year note payable dated January 1, 2020.

Required - Calculate WAAE, avoidable interest, actual interest, and interest to be capitalized?

Reference no: EM132765066

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