During 2019, Barden Building Company constructed various assets at a total cost of $10,500,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2019 were $7,000,000. During 2019, Barden earned $1,500 in interest revenue on its invested funds.

The company had the following debt outstanding at December 31, 2019:

8%, 5-year note issued specifically to finance construction of those assets, dated January 1, 2018, with interest payable annually on January 1 $4,500,000

6%, ten-year bonds issued at par on March 31, 2019, with interest payable annually on December 31 $5,000,000

Compute the amounts of each of the following (show computations). a. Avoidable interest b. Actual interest costs incurred