Problem:
Nguyen Corp constructed assets costing $600 000. The Weighted average accumulated expenditures on these assets during the year was $400 000. To help pay for construction, $320 000 was borrowed at 10% at the beginning of year. Some funds were not needed for construction so thus were temporarily invested in short term securities which resulted in $4500 interest revenue. Other than the construction funds borrowed, the only other debt outstanding for the year was a $250 000, 10 year, 9% note payable dated January 1991.
What is the amount of interest that should be capitalized by Nguyen Corp during the year of 2005?