During 2018, Barden Building Company constructed various assets at a total cost of $10,500,000.The weighted average accumulated expenditures (WAAE) on assets qualifying for capitalization of interest during 2018 were $7,000,000. The company had the following debt outstanding at December 31, 2018:

10%, 5-year note to finance construction of various assets,

dated January 1, 2017, with interest payable annually on January 1$4,500,000

12%, twelve-year bonds issued at par on December 31, 2009, with interest

payable annually on December 316,000,000

9%, 4-year note payable, dated January 1, 2016, with interest payable

annually on January 13,500,000

Instructions

Compute the amounts of each of the following (show computations).

1.Actual interest

2.Average Interest Rate

3.Avoidable interest

4.Interest to be capitalized during 2018

5.Interest expense reported 2018