Reference no: EM132475663

Point 1: 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:

• $ 5,500,000, 6% note
• $11,100,000,10% bonds

Construction expenditures incurred were as follows:

March 31, 2016                          $3,550,000

June 30, 2016                             5,550,000

November 30, 2016                    1,710,000

February 28, 2017                        2,550,000

• The company's fiscal year-end is December 31.

Required:

Question 1: Calculate the amount of interest capitalized for 2016 and 2017. (Round weighted average interest rate to 2 decimal places and final answers to the nearest whole dollar.)

• Amount for 2016 and 2017