Reference no: EM132475663
Point 1: Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on April 31, 2017. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
- $ 5,500,000, 6% note
- $11,100,000,10% bonds
Construction expenditures incurred were as follows:
March 31, 2016 $3,550,000
June 30, 2016 5,550,000
November 30, 2016 1,710,000
February 28, 2017 2,550,000
- The company's fiscal year-end is December 31.
Required:
Question 1: Calculate the amount of interest capitalized for 2016 and 2017. (Round weighted average interest rate to 2 decimal places and final answers to the nearest whole dollar.)