On January 1, 2016, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2017. Construction expenditures for 2016, which were incurred evenly throughout the year, totaled $7,200,000. Marjlee had the following debt obligations which were outstanding during all of 2016:
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Construction loan, 10%
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$
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1,800,000
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Long-term note, 9%
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2,400,000
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|
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Long-term note, 6%
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4,800,000
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Required:
Calculate the amount of interest capitalized in 2016 for the building using the specific interest method.