Exercise 10-7 Pina Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $4,993,900on January 1, 2017. Pina expected to complete the building by December 31, 2017. Pina has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2016	$2,020,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2018	1,599,500
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2021	1,009,400

Assume that Pina completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,193,600, and the weighted-average amount of accumulated expenditures was $3,824,200. 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

$

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Compute the depreciation expense for the year ended December 31, 2018. Pina elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of30years and a salvage value of $298,700.(Round answer to 0 decimal places, e.g. 5,275.)

Depreciation Expense

$

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