Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,920,000 on March 1, $1,248,000 on June 1, and $3,058,100 on December 31.
Hanson Company borrowed $1,059,300 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,480,400 note payable and an 11%, 4-year, $3,566,400 note payable. Compute avoidable interest for Hanson Company. Use the weighted-average interest rate for interest capitalization purposes.
Avoidable interest?