Problem $10-9($Algo$)$ Interest capitalization; specific interest method $[$LO$10-7]$

On January $1,2024,$ the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September $30,2025.$ Expenditures on the project were as follows:

On January $1,2024,$ the company obtained a $\backslash$$$3,500,000$ construction loan with a $\backslash (12\backslash \%\backslash )$ interest rate. The loan was outstanding all of $2024$ and $2025.$ The company's other interest$-$bearing debt included two long$-$term notes of $\backslash$$$3,000,000$ and $\backslash$$$7,000,000$ with interest rates of $\backslash (8\backslash \%\backslash )$ and $\backslash (10\backslash \%\backslash ),$ respectively. Both notes were outstanding during all of $2024$ and $2025.$ Interest is paid annually on all debt. The company's fiscal year$-$end is December $31.$

Required:

$1.$ Calculate the amount of interest that Mason should capitalize in $2024$ and $2025$ using the specific interest method.

$2.$ What is the total cost of the building?

$3.$ Calculate the amount of interest expense that will appear in the $2024$ and $2025$ income statements.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req $1$ and $\backslash (3\backslash$quad $\backslash )$ Req $2$

$1.$ Calculate the amount of interest that Mason should capitalize in $2024$ and $2025$ using the specific interest method.

$3.$ Calculate the amount of interest expense that will appear in the $2024$ and $2025$ income statements.

Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Problem $10-9($Algo$)$ Interest capitalization; specific interest method $[$LO$10-7]$

On January $1,2024,$ the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September $30,2025.$ Expenditures on the project were as follows:

On January $1,2024,$ the company obtained a $\backslash$$$3,500,000$ construction loan with a $\backslash (12\backslash \%\backslash )$ interest rate. The loan was outstanding all of $2024$ and $2025.$ The company's other interest$-$bearing debt included two long$-$term notes of $\backslash$$$3,000,000$ and $\backslash$$$7,000,000$ with interest rates of $\backslash (8\backslash \%\backslash )$ and $\backslash (10\backslash \%\backslash ),$ respectively. Both notes were outstanding during all of $2024$ and $2025.$ Interest is paid annually on all debt. The company's fiscal year$-$end is December $31.$

Required:

$1.$ Calculate the amount of interest that Mason should capitalize in $2024$ and $2025$ using the specific interest method.

$2.$ What is the total cost of the building?

$3.$ Calculate the amount of interest expense that will appear in the $2024$ and $2025$ income statements.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req $1$ and $\backslash (3\backslash$quad $\backslash )$ Req $2$

$1.$ Calculate the amount of interest that Mason should capitalize in $2024$ and $2025$ using the specific interest method.

$3.$ Calculate the amount of interest expense that will appear in the $2024$ and $2025$ income statements.

Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.