On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own
Question:
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,850,000 at 10% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:
$4,000,000, 14% bonds $1,000,000, 10% long-term note
Construction expenditures incurred during 2021 were as follows:
January 1 $ 800,000 March 31 1,400,000 June 30 1,040,000 September 30 800,000 December 31 600,000
What I need:
Please help me calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) Thanks