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On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for...

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Accounting

On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The company borrowed $2,100,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:

$7,000,000, 13% bonds
$3,000,000, 8% long-term note

Construction expenditures incurred during 2018 were as follows:

January 1 $ 860,000
March 31 1,460,000
June 30 1,112,000
September 30 860,000
December 31 660,000

Required: Calculate the amount of interest capitalized for 2018 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%).)

Date Expenditure Weight Average
January 1 x =
March 31 x =
June 30 x =
September 30 x =
December 31 x =
Accumulated expenditure
Average Interest Rate Capitalized Interest
Average accumulated expenditures
x % =
x % =

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