Reference no: EM132047511
Question - Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on April 31, 2017. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$4,000,000, 6% note
$16,000,000, 10% note
Construction expenditures incurred were as follows:
March 31, 2016 $4,000,000
June 30, 2016 $6,000,000
November 30, 2016 $1,800,000
February 28, 2017 $3,000,000
The company's fiscal year-end is December 31.
Required: Calculate the amount of interest capitalized for 2016 and 2017.