On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024:

Construction expenditures incurred during 2024 were as follows:

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

Required:
Calculate the amount of interest capitalized for 2024 and 2025.

Transcribed Image Text:

$5,000,000, 12% bonds $3,000,000, 8% long-term note