1. (6 points) In 2025, Wege Company constructed various assets at a total cost of $14,700,000. The weighted-average accumulated expenditures on assets qualifying for capitalization of interest during 2025 were $9,700,000. The Company had the following debt outstanding at December 31, 2025:

1.10%, 5-year note to finance the construction of various assets, dated January 1, 2025, with interest payable annually on January 1$6,300,000

2.12%, 10-year bonds issued at par on December 31, 2016, with interest payable annually on December 317,000,000

3.9%, 3-year note payable, dated January 1, 2024, with interest payable annually on January 13,500,000

Instructions

Compute the amounts of each of the following. Show all of your computations.

1.Avoidable interest

2.Total interest to be capitalized during 2025