Zhang Ltd. (see BE10.2) borrowed HK$1,000,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, HK$2,000,000 note payable and an 11%, 4-year, HK$3,500,000 note payable. Compute the capitalization rate used for interest capitalization purposes.
Zhang Ltd. is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were HK$1,800,000 on March 1, HK$1,200,000 on June 1, and HK$3,000,000 on December 31. Compute Zhang's weighted-average accumulated expenditures for interest capitalization purposes.