7. (7 points) A building was constructed on land purchased last year at a cost of $150,000. Construction began on January 1 and was completed on December 31. The payments to the contractor were as follows. Date Payment 1/1 $120,000 4/1 320,000 8/1 460,000 10/1 100,000 To finance construction of the building, a $400,000, 12% construction loan was taken out on January 1. The loan was repaid on December 31. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8%. Determine the amount of interest to be capitalized.
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