B constructed a warehouse for its own use. B started construction on January 1 and completed construction on December 31. Construction expenditures were as follows:

• $750,000 on January 1
• $840,000 on March 31
• $360,000 on May 1
• $720,000 on July 31
• $240,000 on September 1
• $120,000 on December 31

During the entire year B had the following outstanding notes payable; none of the notes were issued to specifically fund the warehouse construction :

• A 3.00%, 5-year $4,000,000 note payable
• A 5.00%, 15-year $3,000,000 note payable
• A 4.20%, 10-year $2,000,000 note payable
• A 2.50%, 4-year $15,000,000 note payable

1. What were Bs total interest costs for the year?
2. What amount of interest should B capitalize on this construction project?
3. What was Bs interest expense for the year?

When necessary, round any interest rate as follows: 4.873% = 4.9% while 3.314% = 3.3%.