Question $3$

On January $1,$ year $1,$ the Maxlee Company began construction of an office building to be used

as its corporate headquarters. The building was completed early in year $2.$ Construction expenditures

for year $1,$ which were incurred evenly throughout the year, totaled $$5,000,000.$ Maxlee had the

following debt obligations which were outstanding during all of year $1$ :

Required:

Calculate the amount of interest capitalized in year $1$ for the building using the specific interest

method.