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Windsor Inc. is a book distributor that had been operating in its original facility since $1995.$ The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of $\backslash (15\backslash \%\backslash )$ for Windsor since $2020.$ Windsor's original facility became obsolete by early $2025$ because of the increased sales volume and the fact that Windsor now carries DVDs in addition to books.

On June $1,2025,$ Windsor contracted with Black Construction to have a new building constructed for $\backslash (\backslash$$ $4,640,000\backslash )$ on land owned by Windsor. The payments made by Windsor to Black Construction are shown in the schedule below.

Construction was completed and the building was ready for occupancy on May $27,2026.$ Windsor had no new borrowings directly associated with the new building but had the following debt outstanding at May $31,2026,$ the end of its fiscal year.

$10\backslash \%,5-$year note payable of $\backslash$$$2,320,000,$ dated April $1,2022,$ with interest payable annually on April $1.$

$\backslash (12\backslash \%\backslash ),10-$year bond issue of $\backslash (\backslash$$ $3,480,000\backslash )$ sold at par on June $30,2018,$ with interest payable annually on June $30.$

The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material.

$($a$)$

Your answer is correct.

Compute the weighted$-$average accumulated expenditures on Windsor's new building during the capitalization period.

Weighted$-$average accumulated expenditures $\backslash (\backslash$$ $\backslash$$ $\backslash$square $1,450,000\backslash )$

eTextbook and Media

$($b$)$

Your answer is correct.

Compute the avoidable interest on Windsor's new building. $($Round intermediate percentage calculation to $1$ decimal place, e$.$g$.15\mathrm{.}6\backslash \%$ and final answer to $0$ decimal places, e$.$g$.5,125.)$

Avoidable interest $\backslash$$

$($c$)$

Your answer is incorrect.

Some interest cost of Windsor Inc. is capitalized for the year ended May $31,2026.$ Compute the amount of each of the items that must be disclosed in Windsor's financial statements.

Total actual interest cost $\backslash$$

Total interest capitalized $\backslash$$

Total interest expensed $\backslash$$

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