On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows:

January 1, 2024$ 1,300,000March 1, 2024750,000June 30, 2024300,000October 1, 2024650,000January 31, 2025495,000April 30, 2025810,000August 31, 20251,350,000

On January 1, 2024, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2024 and 2025. The companys other interest-bearing debt included two long-term notes of $4,500,000 and $6,500,000 with interest rates of 5% and 7%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The companys fiscal year-end is December 31.

Required:

Using the weighted-average interest method, answer the following questions:

1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.