Crane Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $2,500,000 on January 1, 2025. Crane expected to complete the building by December 31, 2025. Crane has the following debt obligations outstanding during the construction period.
Construction loan-12% interest, payable semiannually, issued December 31, 2024 $1,000,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2026 750,000
Long-term loan-11% interest, payable on January 1 of each year, principal payable on January 1, 2029 500,000
(a)
(b)
Your answer is incorrect.
Compute the depreciation expense for the year ended December 31, 2026. Crane elected to depreciate the building on a straight line basis and determined that the asset has a useful life of 30 years and a salvage value of $150,000. (Round answer to 0 decimal)