Solara Company entered into a contract with Hammer Construction Company to construct a building. Construction began in 2014 and was completed in 2015 . As of January 1 . 2015, Solara had made total progress payments to Hammer of $50,000 . In addition, interest capitalized on the building during 2014 was $2,500 . Solara made additional payments on June 30, 2015, and December 31 . 2015 . Solara had
issued $80,000 of 9% bonds to finance part of the construction. The average interest on Solara's additional debt was 11% for 2015. How much interest should be capitalized by Solara for 2015?
a. $6,750
b. $6,975
c. $13,500
d. $13,725
B
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