On January 1, 2016, the Company began construction of a building to be used as its office headquarters. The building was completed on June 30, 2017. Expenditures on the project, mainly payments to subcontractors, were as follows: January 1, 2016 $ 500,000, March 31, 2016 400,000, September 30, 2016 600,000, Accumulated expenditures at December 31, 2016 (before interest capitalization) $1,500,000, January 31, 2017 600,000, April 30, 2017 300,000. On January 1, 2016, the company obtained a $1 million construction loan with an 8% interest rate. The loan was outstanding during the entire construction period. The companys other interest-bearing debt included two long-term notes of $2,000,000 and $4,000,000 with interest rates of 6% and 12%, respectively. Both notes were outstanding during the entire construction period.

Determine the average accumulated expenditures for 2016 and 2017 year. Calculate the amount of interest to be Capitalized for 2016.

Date	Actual Expenditure	Capitalization Perood	Weighted-Average Accumulated Expenditure
January 1, 2016	500,000
March 31, 2016	400,000
September 30, 2016	600,000

Date	Actual Expenditure	Capitalization Perood	Weighted-Average Accumulated Expenditure
January 1, 2017
January 31, 2017	600,000
April 30, 2017	300,000