Situation III: Fleming, Inc. has a fiscal year ending April 30. On May 1, 2020, Fleming borrowed $10,000,000 at 11% to finance construction of its own building. Repayments of the loan are to com- mence the month following completion of the building. During the year ended April 30, 2021, ex- penditures for the partially completed structure totaled $7,000,000. These expenditures were incurred evenly throughout the year. Interest earned on the unexpended portion of the loan amounted to $650,000 for the year.

Instructions

How much should be shown as capitalized interest on Fleming's financial statements at April 30, 2021?