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Compute avoidable interest for Kingbird Company

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Question - Kingbird Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $4,320,000 on March 1, $2,880,000 on June 1, and $7,200,000 on December 31.

Kingbird Company borrowed $2,400,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 8%, 5-year, $4,800,000 note payable and an 11%, 4-year, $8,400,000 note payable. Compute avoidable interest for Kingbird Company. Use the weighted-average interest rate for interest capitalization purposes.

Reference no: EM132515043

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