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9) On January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2019.
9)
On January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The only interest-bearing debt the company had outstanding during 2018 was long-term bonds with a book value of $10,900,000 and an effective interest rate of 7%. Construction expenditures incurred during 2018 were as follows:
| January 1 | $ | 590,000 | |
| March 1 | 654,000 | ||
| July 31 | 534,000 | ||
| September 30 | 690,000 | ||
| December 31 | 390,000 | ||
Required: Calculate the amount of interest capitalized for 2018.
| Date | Expenditure | Weight | Average | ||
| 1-Jan | X | = | |||
| 1-Mar | X | = | |||
| 31-Jul | X | = | |||
| 30-Sep | X | = | |||
| 31-Dec | X | = | |||
| Accumulated expenditure | $ | $ | |||
| Average | Interest Rate | Capitalized Interest | |||
| Average accumulaed expenditures | $ | X | % | = | $ |
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