Question: How to calculate borrowing cost in this question ? Construction of the new restaurant started on March 1, 20X5, and was completed on November 1,

How to calculate borrowing cost in this question ?

Construction of the new restaurant started on March 1, 20X5, and was completed on

November 1, 20X5, with the following payments to the contractor:

Date Payment

March 1 $200,000

May 1 450,000

July 1 360,000

September 1 180,000

November 1 100,000

Yum-Yum took out a $500,000 bank loan at 10% interest on March 1, 20X5, to finance the construction. The loan was repaid on November 1, 20X5, when construction was complete.The company has $600,000, 5%, 15-year bonds issued January 1, 20X2, with interest payable annually on December 31. It also had a $400,000, 12%, three-year note outstanding during the year. The payments to the contractor have been recorded in the building account, while the interest payments on the bank loan, bonds and note were recorded as interest expense.

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