Question

The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $ 13 comma 000 comma 000 bond​ issuance, the Electric Mixer Division used $ 9 comma 500 comma 000 and the Electric Lamp Division used $ 3 comma 500 comma 000 for expansion. Interest costs on the bond totaled $ 975 comma 000 for the year. What amount of interest costs should be allocated to the Electric Lamp​ Division? (Round any intermediary calculations two decimal places and your final answer to the nearest​ dollar.)

Answer 1

Step-by-step explanation:

Bond payable ratio:

Electric Mixer Division = 9,500,000 / 13,000,000 = 73%

Electric Lamp division = 3,500,000 /13,000,000 = 27%

Interest Expesens Allocated to Electric Lamp Division = 975,000*27% = $263250