pepp Wrote: ------------------------------------------------------- > > > > 1. Total capitalized interest: 25000 + 50000 = > > 75000 > > Shouldn’t it be 500,000? and total capitalized > > amount is 5,250,000 > > > > 2. Interest expensed= 250000. Where does this > > number come from? If 10% of $3M debenture is > > expensed, it’s $300,000 > > > > Confused, thank you for clarification. > > Hopetobeat, > > A review of book and study notes is due for you. I > don’t mean it in an insulting way, but as you can > tell no one got this question except strange, > mostly because no one of us remember when to > capitalize and when not to capitalize and when you > are capitalizing, sometimes you can even > capitalize interest from your existing debt. > > Pg 352 is what you need from book 3!!! Got it. An example from schweser notes. Good catch!
Interest expensed should be 300k. Why is it not? If interest was capitalized it doesn’t go under interest expensed though I thought (unless you are readjusting for analysts).