Problem
On March 1, 2017, Newton Company purchased land for an office site by paying $2,700,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction:
Date Expenditures
March 1, 2017 $ 1,800,000
April 1, 2017 2,520,000
May 1, 2017 4,500,000
June 1, 2017 4,800,000
The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3,600,000 was borrowed on March 1, 2017 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2017 was a $1,500,000, 12%, 6-year note payable dated January 1, 2017.
Assume the weighted-average accumulated expenditures for the construction project are $4,350,000. What is The amount of interest cost to be capitalized during 2017.