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How much interest cost should it capitalize during the year

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Question - Visa Inc. self-constructed a factory building.

The project began on January 1st, 2021 and was completed on December 31st, 2021.

A total of $1,850,000 of expenditures were incurred evenly throughout the year.

On January 1st, 2021, Visa Inc. issued a $1,387,500 construction loan with a 11% to finance the project.

In addition to the construction loan, Visa Inc. had a $2,775,000 general loan with a 11.75% interest rate outstanding during the year 2021.

Visa Inc. follows the weighted-average interest method. How much interest cost should it capitalize during the year 2021?

Reference no: EM133096723

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