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On January 1, 2024, the Mason Manufacturing Company began construction of...

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Accounting

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On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30,2025 . Expenditures on the project were as follows: On January 1,2024 , the company obtained a $3,200,000 construction loan with a 15% interest rate. The loan was outstanding all of 2024 and 2025 . The company's other interest-bearing debt included two long-term notes of $3,000,000 and $7,000,000 with interest rates of 11% and 13%, respectively. Both notes were outstanding durikg all of 2024 and 2025 . Interest is paid annually on all debt. The company's fiscal year-end is December 31 . Required: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the specific interest method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements

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