On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was
completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the
construction loan, Highlands had the following debt outstanding throughout 2024
$6,000,000, 14% bonds
$4,000,000, 9% long-term note
Construction expenditures incurred during 2024 were as follows:
January 1
March 31
June 30
September 30
December 31
$620,000
1,220,000
824,000
620,000
420,000
Required:
Calculate the amount of interest capitalized for 2024 using the specific interest method.
Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered
as 12.3%).
Data
January 1
March 31
June 30
September 30
December 31
Expenditure
Weight
Average
Accumulated expenditure
Amount
Interest
Rate
Capitalized
Interest
Average accumulated expenditures
X
%