Teal Mountain Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $11,600,000 on January 1, 2017. Teal Mountain expected to complete the building by December 31, 2017. Teal Mountains debt, all of which was outstanding during the construction period, was as follows.

Construction loan11% interest, payable semiannually, issued December 31, 2016; $5,800,000
Long-term loan #1 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,740,000
Long-term loan #212% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $4,060,000

Assume that Teal Mountain completed the facility on December 31, 2017, at a total cost of $11,948,000, and the weighted-average amount of accumulated expenditures was $7,888,000.

Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to 0 decimal places, e.g. 5,275.)

Avoidable Interest

876032

Attempts: 1 of 2 used

Using multiple attempts will impact your score.

20% score reduction after attempt 1

(b)

Your answer is incorrect.

Compute the depreciation expense for the year ended December 31, 2018. Teal Mountain estimated the facilitys useful life to be 25 years with a salvage value of $1,160,000. Teal Mountain elected to depreciate the facility on a straight-line basis.

Please answer part B and show all work