On January 1, 2011, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2012. Construction expenditures for 2011, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2011:
Construction loan, 10% ...... $1,500,000
Long-term note, 9% ....... $2,000,000
Long-term note, 6% ....... $4,000,000
Required:
Calculate the amount of interest capitalized in 2011 for the building using the specific interest method.