Current Attempt in Progress

Riverbed Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of

$4,020,000$ on January $1,2022.$ Riverbed expected to complete the building by December $31,2022.$ Riverbed has the following debt

obligations outstanding during the construction period.

Construction loan$-12\%$ interest, payable semiannually, issued December $31,2021$

Short$-$term loan$-10\%$ interest, payable monthly, and principal payable at maturity on May $30,2023$

$($a$)$

Assume that Riverbed completed the office and warehouse building on December $31,2022,$ as planned at a total cost of

$4,186,000.$ The following expenditures were made during the period forthis project: January $1,805,000$; April $1,1,205,000$;

July $1,1,605,000$; and October $1,560,000.$ Excess funds from the construction loans were invested during the period and

earned $16,200$ of investment income. Compute the amount of borrowing costs to be capitalized for this project. $($Use interest

rates rounded to $2$ decimal places, e$.$g$.7\mathrm{.}58\%$ for computational purposes and round final answers to $0$ decimal places, e$.$g$.5,275.)$

Borrowing costs $$