Reference no: EM132834282

On January 1, 2020 Fascination Corporation decided to construct a piece of machinery for their state-of-the-art assembly line. The new assembly line was ready for full operation on December 31, 2020.

The cost of the machinery is $1,500,000. The following expenditures were made during 2020.

January 1           $300,000
April 1               $540,000
June 1              $450,000
December 1        $210,000
Total Expenditures  $1,500,000

During the year the company had the following debt outstanding during the entire year:

1. 15%, 3-year note to finance the construction of the machinery $750,000
2. 10%, 5-year note classified as general debt $550,000
3. 12%, 10-year note classified as general debt $600,000

Problem 1: Determine the amount of interest to be capitalized? In order to receive full credit, your answer should include a calculation of actual interest.