Reference no: EM132627110

Question - On July 31, 2020, Larkspur Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed on November 1, 2020. To help finance construction, on July 31 Larkspur issued a $270,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $175,000 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Larkspur made a final $95,000 payment to Minsk. Other than the note to Netherlands, Larkspur's only outstanding liability at December 31, 2020, is a $31,000, 8%, 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.

Required - Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.