Reference no: EM132506847

The following information will be used for four question on the exam:

• On April 1, 2020, Dalinar Company began construction on a new distribution warehouse. Construction was completed on November 30, 2020, at which time the building was placed in service. Dalinar made an initial payment toward construction on April 1, 2020 of $240,000 and made additional payments $30,000 every two months thereafter, beginning on June 1 and continuing through October 1. A final payment of $100,000 was made on November 30 at the completion of construction. Dalinar borrowed $150,000 at 4% on April 1 to partially finance the previously mentioned payment on that date. All other construction costs were paid using cash on hand.

• The only other liability currently owed by Dalinar is a long-term, $120,000 note payable with principal due on December 31, 2024. The long-term note was issued at face-value, has a stated rate of 6%, and has interest payable semiannually every 6 months at June 30 and December 31. At the time the note was issued, the market rate for similar notes was 6%.

Question 1: What is Dalinar's capitalized interest on specific debt?

Question 2: What is Dalinar's interest expense on the income statement?

Question 3: What is Dalinar's balance in the building account on the 2020 balance sheet?