What is the amount of interest that crocus should capitalize

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On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions):

July 1, 2020                     76

October 1, 2020               44

February 1, 2021             52

April 1, 2021                  32

September 1, 2021         31

October 1, 2021            17

Point 1: On July 1, 2020, Crocus obtained a $92 million construction loan with a 7% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 9%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.

Question 1 : What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?

Reference no: EM132499239

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