Song Company started construction on a building on January 1 of this year and completed construction on December 31 of the same year. Song had only two interest notes outstanding during the year, and both of these notes were outstanding for all 1 . months of the year. The following information is available: Average accumulated expenditures ..................... $250,000 Ending balance in
construction in progress before capitalization of interest .................. 360,000 6 percent note incurred specifically for the project . 150,000 9 percent long-term note ............................. 500,000 What amount of interest should Song capitalize for the current year?
a. $15,000
b. $18,000
c. $22,500
d. $27,900
B
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