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What is the amount of interest that Crocus should capitalize

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Question - 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 64

October 1, 2020 32

February 1, 2021 40

April 1, 2021 26

September 1, 2021 25

October 1, 2021 11

On July 1, 2020, Crocus obtained a $80 million construction loan with a 6% 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 8%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.

Required - What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?

Reference no: EM132894806

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