On December 31, 2012, Cia Company borrowed $400,000 from First Bank with interest payable annually at 10% maturing on December 31, 2015 in order to provide funds for the construction of a building to use as its corporate headquarters. On January 1, 2013, Cia Company started the construction. The project was completed and ready for occupancy on December 31, 2013. Cia incurred the following expenditures related to construction during 2013: January 1 $400,000 April 1 350,000 October 31 900,000 December 31 250,000 $1,900,000

1. Compute Actual Interest and Avoidable Interest for the project for 2013. (Hint: you will also need to calculate a weighted average interest rate on Cias general debt.