Why is $6,760,600 divided by 2?

Cheyenne, Inc. has a fiscal year ending April 30. On May 1,2025 , Cheyenne borrowed $9,658,000 at 11% to finance construction of its own building. Repayments of the loan are to commence the month following completion of the building. During the year ended April 30, 2026, expenditures for the partially completed structure totaled $6,760,600 (weighted-average accumulated expenditures were $3,380,300 ). Interest earned on the unexpended portion of the loan amounted to $627,770 for the year. How much should be shown as capitalized interest on Cheyenne's financial statements at April 30, 2026? Capitalized interest on Cheyenne's financial statements $ $371,833 The requirement is to determine the amount of interest to be capitalized on the financial statements at April 30 , 2026. The GAAP requirements are met: (1) expenditures for the asset have been made, (2) activities that are necessary to get the asset ready for its intended use are in progress, and (3) interest cost is being incurred. The amount to be capitalized is determined by applying an interest rate to the weighted-average amount of accumulated expenditures for the asset during the period. Because the $6,760,600 of expenditures incurred for the year ended April 30,2026 , were incurred evenly throughout the year, the weighted-average amount of expenditures for the year is $3,380,300,($6,760,6002). Therefore, the amount of interest to be capitalized is $371,833($3,380,3000.11). In any period, the total amount of interest cost to be capitalized shall not exceed the total amount of interest cost incurred by the enterprise. (Total interest is $1,062,380= $9,658,0000.11 ). Finally, the interest earned of $627,770 is irrelevant to the question addressed in this problem because such interest earned on the unexpended portion of the loan is not to be offset against the amount eligible for capitalization