During 2020, Winsor Company constructed a machinery at a total cost of $7,100,000. The construction began on January 1 and was completed on December 31, 2020.

Actual expenditures during 2020:

January 1	$1,000,000
February 29	$3,600,000
August 1	$2,400,000
December 31	$100,000
Total	$7,100,000

The company had the following debt outstanding on December 31, 2020:

1.	9%, 5-year note to finance construction of machinery, dated January 1, 2020.	$3,500,000
2.	10%, 20-year bonds issued at par on July 1, 2018.	$4,000,000
3.	12%, 10-year note payable, dated January 1, 2019.	$6,000,000

Instructions

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

(Note: you may not use all rows/columns of the provided tables)

1. Weighted-average accumulated expenditures. (3 points)

2. Avoidable interest. (4 points)

Computation of weighted average interest rate:

Avoidable interest

	X		=

3. Total actual interest cost. (3 points)

	Actual interest cost

4. Total interest to be capitalized during 2020 is $ .

because . (2 points)

5. Prepare the Journal entries needed on the book of Winsor Company to capitalize interest. (3 points)

Account	Debit	Credit