Record the journal entries on the four payment dates

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Question: • January 1: $1,000,000

• March 1: $1,500,000

• June 1: $2,000,000

• September 1: $1,000,000

On January 1, 2019, Company X started the construction of a building for $5,500,000. The payment occurred in this order:

Company X took out an 8%, 2-year loan on January 1, 2019 to use for the building construction for $3,000,000. The company also had other debt already on its books. The first is a 5%, 5-year note dated January 1, 2018 for $5,000,000 with annual interest payments. The second is a 6%, 6-year note dated January 1, 2017 for $10,000,000 with annual interest payments.

Compute 1) the weighted average accumulated expenditures,

2) avoidable interest, and

3) actual interest.

Record the journal entries on the four payment dates.

Reference no: EM132764916

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