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Current Attempt in Progress Riverbed Furniture started construction of a combination office and warehouse building...

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Accounting

Current Attempt in Progress
Riverbed Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of
4,020,000 on January 1,2022. Riverbed expected to complete the building by December 31,2022. Riverbed has the following debt
obligations outstanding during the construction period.
Construction loan-12% interest, payable semiannually, issued December 31,2021
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30,2023
(a)
Assume that Riverbed completed the office and warehouse building on December 31,2022, as planned at a total cost of
4,186,000. The following expenditures were made during the period forthis project: January 1,805,000; April 1,1,205,000;
July 1,1,605,000; and October 1,560,000. Excess funds from the construction loans were invested during the period and
earned 16,200 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest
rates rounded to 2 decimal places, e.g.7.58% for computational purposes and round final answers to 0 decimal places, e.g.5,275.)
Borrowing costs
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