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:

On January 1, 2024, the company obtained a $3 million construction loan with a 12% 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 $4,600,000 and $6,600,000 with interest rates of 6% and 8%, 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

January1,2024March1,2024June30,2024October1,2024January31,2025April30,2025August31,2025$1,330,000780,000230,000660,000540,000855,0001,440,000