1. Determine capitalized interest cost. Construction began: Jan. 1 Construction ended: Dec. 31 Expenditures: March 1 June 1 December 31 $1,800,000 $1,200,000 $3,000,000 Jan 1: borrowed $1,000,000 on a 5-year, 12% note to finance the construction Outstanding all year: 10%, 5-year $2,000,000 note payable 11%, 4-year $3,500,000 note payable

1. Determine capitalized interest cost. Construction began: Jan. 1 Construction ended: Dec. 31 Expenditures: Jan 1: borrowed $1,000,000 on a 5 -year, 12% note to finance the construction Outstanding all year: 10%,5-year $2,000,000 note payable 11%,4-year $3,500,000 note payable