Business, 06.03.2020 17:37 SkinnestXOXO

On January 1, 2018, the Gilligan Company began construction on a new manufacturing facility for its own use. The building was completed in early 2019. Throughout 2018, the company had interest-bearing debt, which included two long-term notes of $4,000,000 and $6,000,000 with annual interest rates of 6% and 8%, respectively. Construction expenditures incurred during 2018 were as follows:

January 1 $ 840,000
March 31 1,440,000
June 30 1,088,000
September 30 840,000
December 31 640,000

Required:
Calculate the amount of interest capitalized for 2018 using the specific interest method.

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