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Calculate the appropriate capitalization rate on borrowings

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Question - Windsor Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.5 million on March 1, $1.2 million on June 1, and $4 million on December 31. Windsor Company borrowed $1 million on March 1 on a five-year, 13% note to help finance the building construction. In addition, the company had outstanding all year a $2-million, five-year, 13% note payable and a $3.4-million, four-year, 18% note payable. Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs.

Reference no: EM132745965

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