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Calculate the amount of interest capitalized

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Reference no: EM131969085

Exercise - Interest Capitalization

On January 1, 2013, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2014. The only interest-bearing debt the company had outstanding during 2013 was long-term bonds with a book value of $10,000,000 and an effective interest rate of 8%. Construction expenditures incurred during 2013 were as follows:

January 1 $ 500,000

March 1 600,000

July 31 480,000

September 30 600,000

December 31 300,000

Required: Calculate the amount of interest capitalized for 2013.

Reference no: EM131969085

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