Question Details

Barden Building Company constructed various assets 



Pr. 1—Capitalization of interest.
During 2010, Barden Building Company constructed various assets at a total cost of $8,400,000.  The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2010 were $5,600,000. The company had the following debt outstanding at 
December 31, 2010:

1.	10%, 5-year note to finance construction of various assets, 
	dated January 1, 2010, with interest payable annually on January 1	$3,600,000

2.	12%, ten-year bonds issued at par on December 31, 2004, with interest 
	payable annually on December 31	4,000,000

3.	9%, 3-year note payable, dated January 1, 2009, with interest payable 
	annually on January 1	2,000,000

Instructions
Compute the amounts of each of the following (show computations).
1.	Avoidable interest.
2.	Total interest to be capitalized during 2010.





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