Wad Industries, signed a contract for the construction of their new headquarters building on January 1, 2018, with a total construction cost of $1,200,000. Work on the construction began on that date, and the building was completed on December 31, 2018. Wad paid the contractor a total of $ 200,000 as the first payment for the construction on January 1, 2018. To help finance the project, Wad signed a two year construction loan note with the local bank the amount of $500,000, requiring an annual interest payment of 6%.

In addition to the construction loan, Wad had other liabilities; a long-term note payable in the amount of $300,000 that began in 2016, and required 5% annual Interest, and some bonds payable that were issued in 2015, the amount of $1,000,000, that required annual interest of 8%.

In addition to the down payment Wad made to the contractor on January 1, 2018, Wad made the following payments to the contractor during the year:

March 1 $500,000

September 1 $300,000

December 1 200,000

MUST: Calculate the weighted average accumulated expenditure for Martin to use in determining the amount of avoidable interest for 2018. Also calculate the amount of avoidable Interest for 2018. LASTLY calculate the correct amount of interest expense to be reported on Martin's income statement for 2018.

NOTE: no excel.