Use the Following Information to Solve the Following Questions The Office Building Was Completed and Ready for Occupancy on

question 40

Multiple Choice

Use the following information to solve the following questions:
On March 1, 2020, Mauritania Ltd. purchased land for $ 270,000 cash, which they intend to use for their new head office. Construction on the office building began on March 1. The following expenditures were incurred for construction:
$$\begin{array} { l l } \text { Date } & \text { Expenditures } \\\text { March } 1,2020 &\$450,000\\\text { April } 1,2020 & \mathbf { 2 5 2 , 0 0 0 } \\\text { May } 1,2020 & 450,000 \\\text { June } 1,2020 & 720,000\end{array}$$ The office building was completed and ready for occupancy on July 1. To help pay for construction, Mauritania borrowed $ 360,000 on March 1, 2020, on a 9%, three-year note payable. Other than this note, the only other debt outstanding during 2020 was a $ 150,000, 10%, six-year note payable dated January 1, 2019.
-The actual interest cost incurred during 2020 was

• A) $ 27,000.
• B) $ 39,500.
• C) $ 42,000.
• D) $ 47,400.

---

Definitions:

Reciprocity

A mutual exchange of privileges or services between two parties where each benefits from the agreement.

Industrial Buying Practice

The systematic process that organizations use to make purchase decisions regarding raw materials, processed materials, or professional services.

Products and Services

Goods that are manufactured or created for sale, and activities or benefits offered for consumption, respectively.