Compute avoidable interest for sunland company

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Question - Sunland Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1, $1,200,000 on June 1, and $3,026,100 on December 31.

Sunland Company borrowed $1,159,000 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,017,300 note payable and an 10%, 4-year, $3,599,800 note payable. Compute avoidable interest for Sunland Company. Use the weighted-average interest rate for interest capitalization purposes.

Reference no: EM132166267

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