Construction of the new restaurant started on March 1, 20X5, and was completed on November 1, 20X5, with the following payments to the contractor:
Date Payment
March 1 $200,000
May 1 450,000
July 1 360,000
September 1 180,000
November 1 100,000
Yum-Yum took out a $500,000 bank loan at 10% interest on March 1, 20X5, to finance the construction. The loan was repaid on November 1, 20X5, when construction was complete. The company has $600,000, 5%, 15-year bonds issued January 1, 20X2, with interest payable annually on December 31. It also had a $400,000, 12%, three-year note outstanding during the year.