Kingbird Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of 4,100,000 on January 1, 2022. Kingbird expected to complete the building by December 31, 2022. Kingbird has the following debt obligations outstanding during the construction period.

Construction loan-8% interest, payable semiannually, issued December 31, 2021

1,650,000

Short-term loan-6% interest, payable monthly, and principal payable at maturity on May 30, 2023

1,320,000

Long-term loan-7% interest, payable on January 1 of each year. Principal payable on January 1, 2026

825,000