Question $2$

$25$ points Please show all work to receive full credit.

On January $1,2023,$ Jones Properties began construction of a warehouse. The facility was completed in late $2024.$ Expenditures for the first year of construction on the building were as follows:

January $1,2023$ $$1,100,000$

April $1,20231,425,000$

June $1,20231,200,000$

October $31,2023940,000$

December $31,20231,375,000$

On January $1,2023,$ to help finance the construction, Jones Properties obtained a $$2,000,000$ construction loan with an $8\mathrm{.}45\%$ interest rate. The construction loan was outstanding for the entire period of construction.

The company$$s other interest$-$bearing debt included two long$-$term notes of $$2,750,000$ and $$1,300,000$ with interest rates of $7\mathrm{.}5\%$ and $8\mathrm{.}25\%,$ respectively. Both notes were outstanding during the entire period of construction. The company$$s fiscal year$-$end is December $31.$

a$.$ Calculate the amount of interest that Jones Properties should capitalize in $2023$ using the specific interest method.

b$.$ Calculate the total cost of the facility, as of December $31,2023.$

c$.$ Calculate the amount of interest expense that will appear in the $2023$ income statement for Jones Properties.

Do not round intermediate calculations and round final answer to the nearest whole dollar.

Note: Please label your answers and show all work to receive full credit.