ROGER CPA Review Chapter 10 Problems 1,9,10 Saved to this PC References Mailings Review Help View Tell me what you want to do AaBbCcD AaBbCcDc AaBbC AaBbCcD A A, !?, Ica-E. | LT Normal]TI No Spac Heading 1 Heading 2 Paragraph Styles P109 Interest capitalization; specific interest method L010-7 On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 March 1, 2018 $1,000,000 600,000 800,000 600,000 270,000 585,000 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 900,000 On January 1, 2018, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2018 and 2019. The company's other interest-bearing debt included two long-term notes of $4,o00,ooo and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2018 and 2019. 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 2018 and 2019 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 2018 and 2019 income statements