On January 1, 2021, the company obtained a $3 million loan with a 11% interest rate....

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Solution:

Weighted average interest rate of all debt
Debt	Amount	Interest rate	Interest amount
Loan	$30,00,000	11%	$3,30,000
6% Note	$42,00,000	6%	$2,52,000
8% Note	$62,00,000	8%	$4,96,000
Totals	$1,34,00,000		$10,78,000
Weighted average rate (total interets/ total debt)		8.04%

Year 2021: Weighted-Average accumulated expenditure and interest capitalized
Date	Amount	Capitalization period	Weighted Average Accumulated Expenditures
01 January 2021	$12,00,000	12/12	$12,00,000
01 March 2021	$6,60,000	10/12	$5,50,000
30 June 2021	$5,20,000	6/12	$2,60,000
01 October 2021	$6,20,000	3/12	$1,55,000
Total	$30,00,000		$21,65,000
*Interest rate			8.04%
Interest capitalized in 2021			$1,74,066


Year 2022: Weighted-Average accumulated expenditure
Date	Amount	Capitalization period	Weighted Average Accumulated Expenditures
01 January 2022	$31,74,066	9/9	$31,74,066
31 January 2022	$3,60,000	8/9	$3,20,000
30 April 2022	$6,75,000	5/9	$3,75,000
31 August 2022	$10,80,000	1/9	$1,20,000
Total	$52,89,066		$39,89,066
*Interest rate			8.04%
Interest capitalized in 2022			$2,40,541

Solution 2:

Computation of Cost of Building
Total expenditure before capitalization(8289066-174066)	$51,15,000
Add: Interest capitalized in 2021	$1,74,066
Add: Interest capitalized in 2021	$2,40,541
Total cost of Building	$55,29,607

Solution 3:

Computation of Interest expense
Debt	Amount	Interest rate	Interest amount
Loan	$30,00,000	11%	$3,30,000
6% Note	$42,00,000	6%	$2,52,000
8% Note	$62,00,000	8%	$4,96,000
Total interest incurred			$10,78,000

	2021	2022
Total inerest incurred	$10,78,000	$10,78,000
Less: Interest Capitalized	$1,74,066	$2,40,541
Interest Expense	$9,03,934	$8,37,459

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