On January 1, 2021, Company A began the construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows:

COMPANY A

January 1, 2021 $2,000,000

March 1, 2021 1,600,000

June 30, 2021 1,800,000

October 1, 2021 1,600,000

January 31, 2022 1,270,000

April 30, 2022 1,585,000

August 31, 2022 1,900,000

Construction loan amount $4,000,000

Construction loan interest rate 8%

Long-term note $5,000,000

Long-term note interest rate 4%

Long-term note $7,000,000

Long-term note interest rate 6%

On January 1, 2021, the company obtained a $4 million construction loan with a 8% interest rate. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $5,000,000 and 7,000,000 with interest rates of 4% and 6%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is December 31.

Complete the following.

1) Calculate the amount of interest that the company should capitalize in 2021 and 2022 using the specific interest method.

2) What is the total cost of the building?