What amount should Monty report as capitalized interest

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Problem - On January 1, 2020, Monty, Inc. signed a ?xed-price contract to have Builder Associates construct a major plant facility at a cost of $4,215,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2020, to ?nance the construction cost, Monty borrowed $4,215,000 payable in 10 annual installments of $421,500, plus interest at the rate of 10%. During 2020, Monty made deposit and progress payments totaling $1,580,625 under the contract; the weighted-average amount of accumulated expenditures was $843,000 for the year. The excess borrowed funds were invested in short-term securities, from which Monty realized investment income of $256,400. What amount should Monty report as capitalized interest at December 31, 2020?

Reference no: EM132892534

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