ABC contracted with a company to build a storage warehouse in 2008. Construction began on April 1 at which time ABC paid $50,000. ABC then made additional payments as follows, based on progress made towards completion of the structure:
June 1 $75,000
Sept. 1 $85,000
Dec. 1 $45,000
Dec. 31 $50,000
ABC borrowed $100,000 on January 1 specifically for this project at 8% interest. ABC had the following non-specific borrowings outstanding during the year:
10% $2 million loan
9% $1 million loan
A. How much interest should be capitalized on this building?