Question

On December 31, 2024 Sheffield incorporate borrow 4,020,000 at 13% payable annual of Finance the construction of a new building in 2025. The company made the following expenditures related to the building on March 1 482,400 June 1 804,000 and July 1 2,010,000 and December 1 2,010,000 the building was completed on February 26 additional information is provided as follow other debit outstanding 10 years 14% bond was December 31 of 2018 interest payable annual 5,360,006 years 11% note date December 31, 2022 interest payable annual 2,144,000 second, March 1, 2025 expenditures included land cost of $201,000 three interest revenue of 65,660 earned in 2025

Answer 1

Based on the information provided, let's calculate the interest expense and interest revenue for Sheffield Corporation for the year 2025.

1. Interest Expense:

The company borrowed $4,020,000 at 13% on December 31, 2024, payable annually. The interest expense for the year 2025 can be calculated as:

Interest Expense = Principal * Interest Rate

Interest Expense = $4,020,000 * 13% = $522,600

2. Interest Revenue:

The company earned interest revenue of $65,660 in 2025.

Now, let's calculate the total interest for Sheffield Corporation in 2025:

Total Interest = Interest Expense - Interest Revenue

Total Interest = $522,600 - $65,660

Total Interest = $456,940

Therefore, the total interest expense for Sheffield Corporation in 2025 is $456,940.

Please note that the provided information does not include specific details about the outstanding bonds and notes, such as their principal amounts or maturity dates. If you have any additional information or specific questions, please let me know, and I'll be happy to assist you further.