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On December 31, 2016, Marin Inc. borrowed $4,500,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made
On December 31, 2016, Marin Inc. borrowed $4,500,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $540,000; June 1, $900,000; July 1, $2,250,000; December 1, $2,250,000. The building was completed in February 2018. Additional information is provided as follows.
1. | Other debt outstanding | |||
10-year, 13% bond, December 31, 2010, interest payable annually | $6,000,000 | |||
6-year, 10% note, dated December 31, 2014, interest payable annually | $2,400,000 | |||
2. | March 1, 2017, expenditure included land costs of $225,000 | |||
3. | Interest revenue earned in 2017 | $73,500 |
Determine the amount of interest to be capitalized in 2017 in relation to the construction of the building.
The amount of interest _________ |
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