Exercise 10 - 7 Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5 , 018 , 600 on January 1 , 2014 . Harrisburg expected to complete the building by December 31 , 2014 . Harrisburg has the following debt obligations outstanding during the construction period . Construction loan - 12% interest , payable ble semiannually , issued December 31 , 2013 $2, 018 , 100 Short-term loan - 10% interest , payable monthly , and principal payable at maturity on May 30 , 2015 1 , 619 , 900 Long-term loan - 1 1 % interest , payable on January 1 of 1 , 021 , 500