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During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The...

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Accounting

During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $9,800,000. The company had the following debt outstanding at December 31, 2020:

1. 10%, 5-year note to finance construction of various assets,

dated January 1, 2020, with interest payable annually on January 1 $6,300,000

2. 12%, ten-year bonds issued at par on December 31, 2014, with interest

payable annually on December 31 7,000,000

3. 9%, 3-year note payable, dated January 1, 2019, with interest payable

annually on January 1 3,500,000

Instructions

Compute the amounts of each of the following (show computations).

1. Avoidable interest.

2. Total interest to be capitalized during 2020.

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