Hawkins Corporation began construction on a motel on March 31, 2018. The project was completed on April 30, 2019. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction periods:

$  4,000,000                    6% note

$16,000,000                  10% bonds

Construction expenditures incurred were as follows:

March 31, 2018                           $4,000,000

June 30, 2018                               6,000,000

November 30, 2018                      1,800,000

February 28, 2019                        3,000,000

The company's fiscal year-end is December 31.

Calculate the amount of interest capitalized for 2018 and 2019.

Answer rating: 100% (QA)

Step1 Calculation of weighted average expenditure accumulated during 2018 2019 For 20... View the full answer