E10.7 (LO 2) (Capitalization of Borrowing Costs) McPherson Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of 5,000,000 on January 1, 2022. McPherson expected to complete the building by December 31, 2022. McPherson has the following debt obligations outstanding during the construction period. Instructions (Carry all computations to two decimal places.) a. Assume that McPherson completed the office and warehouse building on December 31, 2022, as planned at a total cost of 5,200,000. The following expenditures were made during the period for this project: January 1 , 1,000,000; April 1, 1,500,000; July 1, 2,000,000; and October 1, 700,000. Excess funds from the construction loans were invested during the period and earned 20,000 of investment income. Compute the amount of borrowing costs to be capitalized for this project