Respuesta :
Answer:
The amount of interest the Agasse will capitalize in 2021 is $60,975
Explanation:
Interest will be capitalized only for the period when loan amount is used for construction of new facility.
To calculate amount of interest using following method
Total loan amount take on April 1, 2021 = $1,500,000
Payments to supplier:
on April 1, 2021 = $409,000
on August 31, 2021 = $909,000
Remaining Loan on December 31, 2021 = $1,500,000 - $409,000 - $909,000
Remaining Loan on December 31, 2021 = $182,000
Interest on Payment of
April 1, 2021 = $409,000 x 10% x (9/12) = $30,675
August 31, 2021 = $909,000 x 10% x (4/12) = $30,300
December 31, 2021 = $182,000 x 10% x 0 = $0
Payment of $182,000 is made on the last date of the year so there will be interest charged on this payment which will be capitalized in this year.
Total amount of interest the Agasse will capitalize in 2021 = $30,675 + $30,300 = $60,975
The total amount of interest the Agasse will capitalize at the end of 2021 is $63,975.
Computation:
Given,
- Loan amount =$1,500,000
- Rate of loan =10%
- Payment of loan at April 1 =$409,000
- Payment of loan at August 31 =$909,000
- Payment of loan on December 31 =$509,000
The computation of the interest amount will be upon the payments made on various dates, and it will be charged from the date of payment until the capitalization date that is December 31.
According to this the interest of payment of December 31 of $509,000 will not be capitalized.
The interest of other two periods is computed as follows:
[tex]\begin{aligned}\text{Interest}&=\text{Payment of April 1}\times\text{Rate of loan}\times\text{Period until Dec. 31}\\&=\$409,000\times10\%\times\frac{9}{12}\\&=\$30,675\end{aligned}[/tex]
[tex]\begin{aligned}\text{Interest}&=\text{Payment of August 31}\times\text{Rate of loan}\times\text{Period until Dec. 31}\\&=\$909,000\times10\%\times\frac{4}{12}\\&=\$30,300\end{aligned}[/tex]
[tex]\begin{aligned}\text{Capitalized Interest}&=\text{Interest of April\;+\;Interest of August}\\&=\$30,675+\$30,300\\&=\$60,975\end{aligned}[/tex]
Thus, the capitalized interest is $60,975.
To know about capitalized interest, refer to the link:
https://brainly.com/question/417585
