Use the Following Information for Questions

question 21

Multiple Choice

Use the following information for questions.
On March 1, 2010, Newton Company purchased land for an office site by paying $540,000 cash.Newton began construction on the office building on March 1.The following expenditures were incurred for construction:
The office was completed and ready for occupancy on July 1.To help pay for construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable.Other than the construction note, the only debt outstanding during 2010 was a $300,000, 12%, 6-year note payable dated January 1, 2010.
-Assume the weighted-average accumulated expenditures for the construction project are $870,000.The amount of interest cost to be capitalized during 2010 is

• A)$78,300.
• B)$82,800.
• C)$90,000.
• D)$100,800.

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Definitions:

Creditors

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