Question
Interest During Construction Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $2.5 million on
Interest During Construction
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $2.5 million on January 1 specifically for the project by issuing a 10%, 5-year, $2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year.
In Year 1, Dexter incurred costs as follows:
January 1 | $300,000 | |
March 1 | 600,000 | |
June 30 | 1,000,000 | |
November 1 | 480,000 |
Calculate Dexter's capitalized interest on the student condominium complex for Year 1.
Capitalized interest = $ fill in the blank 1
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