Exercise 10-7 (Part Level Submission) Whispering Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $4,978,200 on January 1, 2017. Whispering expected to complete the building by December 31, 2017. Whispering has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2016 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2018 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2021 $2,012,000 1,615,200 1,001,500 (a) Your answer is correct. Assume that Whispering completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,207,200, and the weighted average amount of accumulated expenditures was $3,811,300. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.) Avoidable Interest 428,2071 (b) * Your answer is incorrect. Try again. Compute the depreciation expense for the year ended December 31, 2018. Whispering elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $301,200. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation Expense 163,533.33