BE 10-14:

A company constructs a building for its own use.

Construction began on January 1 and ended on December 30. The

expenditures for construction were as follows: January 1, $500,000;

March 31, $600,000; June 30, $400,000; October 30, $600,000. To

help finance construction, the company arranged a 7% construction

loan on January 1 for $700,000. The company's other borrowings,

outstanding for the whole year, consisted of a $3 million loan and a $5

million note with interest rates of 8% and 6%, respectively. Assuming

the company uses the

specific interest method,

calculate the amount of

interest capitalized for the year.

BE 1015

:

Refer to the situation described inBE 1014.

Assuming the company uses the

weighted-average method,

calculate the amount of interest capitalized for the year.