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Calculate the amount of interest capitalized for the year

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Question :

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $610,000: March 31, $710.000; June 30, $510,000: October 30, $930.000.

To help finance construction, the company arranged a 10% construction loan on January 1 for $920,000. The company's other borrowings. outstanding for the whole year. consisted of a $2 million loan and a $4 million note with interest rates of 12% and 9%, respectively.

Assuming the company uses the specific interest method. calculate the amount of interest capitalized for the year.

Reference no: EM132338338

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