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Question - Lady X makes the expenditures listed below on the dates listed below for a self-constructed asset. She takes out a $700,000 loan for this project at 8 percent. She also has a 2,000,000 loan at 4 percent and a 1,000,000 loan at 7 percent.
She has the following expenditures:
720,000 on May 1, 2020
600,000 on September 1, 2020
500,000 on February 1, 2021
Construction ends September 30, 2021
How much depreciation expense does Lady X recognize in 2021 related to this asset?
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