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  1. business
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  3. b constructed a warehouse for its own use. b start

B constructed a warehouse for its own use. B started construction on January 1 and...

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Accounting

B constructed a warehouse for its own use. B started construction on January 1 and completed construction on December 31. Construction expenditures were as follows:

$750,000 on January 1

$600,000 on March 1

$400,000 on May 1

$300,000 on September 30

$250,000 on December 31

During the entire year B had the following outstanding notes payable:

A 4.00%, 5-year $9,000,000 note payable

A 3.25%, 8-year $3,000,000 note payable

A 5.00%, 4-year $2,000,000 note payable

a) What were Bs total interest costs for the year?

b) What amount of interest should B capitalize on this construction project?

c) What was Bs interest expense for the year?

When necessary, round any interest rate as follows: 4.873% = 4.9% while 3.314% = 3.3%.

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