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Discuss the highlands company began construction

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On January 1, 2016, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2017. The company borrowed $1,550,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2016:

$9,000,000, 11% bonds

$3,000,000, 7% long-term note

Construction expenditures incurred during 2016 were as follows:

January 1 $ 680,000
March 31 1,280,000
June 30 896,000
September 30 680,000
December 31 480,000

Required: Calculate the amount of interest capitalized for 2016 using the specific interest method.

Reference no: EM131789326

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