Ch. 10, Q. 3

X Your answer is incorrect Pearl Company is constructing a building Construction began on February 1 and was completed on December 31. Expenditures were $3,600,000 on March 1, $2,400,000 on June 1, and $6,000,000 on December 31. Pearl Company borrowed $2,000,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 84,5-year, $4,000,000 note payable and an 11%, 4-year, $7,000,000 note payable. Compute avoidable interest for Pearl Company. Use the weighted average interest rate for interest capitalization purposes. (Round Weighted average interest rate" to 4 decimal places. 02152 and final answer to decimal places. 5.275.) Avoidable interest $ 477600