Interest During Construction Alta Company is constructing aproduction complex that qualifies for interest capitalization. Thefollowing information is available: Capitalization period: January1, 2016, to June 30, 2017 Expenditures on project: 2016: January 1$ 540,000 May 1 465,000 October 1 600,000 2017: March 1 1,500,000June 30 600,000 Amounts borrowed and outstanding: $1.5 millionborrowed at 12%, specifically for the project $6 million borrowedon July 1, 2015, at 14% $14 million borrowed on January 1, 2011, at8%
Required:
Compute the amount of interest costs capitalized each year.
Capitalized interest, 2016
$
Capitalized interest, 2017
$
If it is assumed that the production complex has an estimatedlife of 20 years and a residual value of 0, compute thestraight-line depreciation in 2017. Round answer to 2 decimalplaces.
$
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