Vaughn Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,024,000 on January 1, 2017. Vaughn expected to complete the building by December 31, 2017. Vaughn has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2016		$1,990,600
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2018		1,603,500
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2021		990,300

Part 1

Assume that Vaughn completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,167,700, and the weighted-average amount of accumulated expenditures was $3,777,200. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Avoidable Interest

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Question 3 Q View Policies Show Attempt History Current Attempt in Progress Vaughn Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5.024,000 on January 1, 2017. Vaughn expected to complete the building by December 31, 2017 Vaughn has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2016 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2018 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2021 $1.990,600 1603.500 990,300 Part 1 x Your answer is incorrect. Assume that Vaughn completed the othce and warehouse building on December 31, 2017, as planned at a total cost of $5,167,700, and the weighted average amount of accumulated expenditures was $3.777.200. Compute the avoidable! interest on this project. (Use interest rates rounded to 2 decimal places, 8.7.58% for computational purposes and round final answers to decimal places, c.8. 5.275.) Avoidable Interest $ 405957