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What is the average carrying amount of the building

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Question - Dee Company borrowed money from different banks with different terms which were intended for general purposes. These loans were granted on January 1, 2021. Below are the details:

7% bank loan 3,500,000

8% short term note 2,000,000

6% long term note 3,700,000

The Company started the construction of its own building that started on January 1, 2021 and was completed on December 31, 2021. Below are the details of the expenses in relation to the construction:

January 1 300,000

February 28 900,000

July 31 1,300,000

October 31 1,000,000

December 31 700,000

Total cost of the building 4,200,000

Required -

a. What is the average carrying amount of the building?

b. What is the capitalization rate?

c. What is the capitalizable borrowing costs?

Reference no: EM132953588

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