capitalization of interest

PROBLEM 5Capitalization of interest. On March 1, Aardvark Co. began construction of a small building. The following expenditures were incurred for construction March 1 $ 300,000 April 1 $ 296,000 May 1 720,000 June 1 1 ,080,000 July 1 400,000 The building was completed and occupied on July 1. To help pay for construction $200,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $2,000,000, 10% note issued two years ago. Instructions (a) Calculate the weighted average accumulated expenditures. Date Expenditure Fraction Weighted expenditure (b) Calculate avoidable interest. (c) At what amount will the building be recorded on Aardvark's books