On January 1, 2024, Grinch Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 $200,000 September 1, 2024 $300,000 December 31, 2024 $300,000 March 31, 2025 $300,000 September 30, 2025 $200,000 Grinch borrowed $750,000 at 12% interest on January 1, 2024 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2024 and 2025. The company uses the specific interest method to capitalize interest, and their year ends on December 31st. Interest expense reported by Grinch Inc. on its 2024 income statement was: $495,000 $459,000 $405,000 $90,000
On January 1, 2024, Grinch Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows:
January 1, 2024 $200,000
September 1, 2024 $300,000
December 31, 2024 $300,000
March 31, 2025 $300,000
September 30, 2025 $200,000
Grinch borrowed $750,000 at 12% interest on January 1, 2024 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2024 and 2025. The company uses the specific interest method to capitalize interest, and their year ends on December 31st.
Interest expense reported by Grinch Inc. on its 2024 income statement was:
$495,000
$459,000
$405,000
$90,000
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