1.Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following information is available:

Capitalization period: January 1, 2013-December 31, 2014 Expenditures on project (incurred evenly):

2013 $30,000

2014 $50,000

Amounts borrowed and outstanding (all debt incurred January 1, 2013)

$10,000 at 10% (specifically for the construction project)

$18,000 at 11% (general debt)

$30,000 at 13% (general debt)

Required:

a.Compute the amount of interest that should be capitalized in 2013 and 2014. (Round interest rates to the nearest hundredths, e.g., 07.62%.)

b. Assume that in 2013 unused borrowed funds were invested and earned interest revenue amounting to $800. How much interest now should be capitalized to the asset account in 2013?

Explain stet by step please.