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On January 1, 2016, the Highlands Company began construction on a new manufacturing facility for...

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Accounting

On January 1, 2016, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2017. The company borrowed $1,700,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2016: $7,000,000, 12% bonds $3,000,000, 7% long-term note Construction expenditures incurred during 2016 were as follows: January 1 $ 740,000 March 31 1,340,000 June 30 968,000 September 30 740,000 December 31 540,000 Required: Calculate the amount of interest capitalized for 2016 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)

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