(Solution) - Thornton Industries began construction of a warehouse on July 1 -(2025 Original AI-Free Solution)

Paper Details

Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$2,000,000, 8% note
$8,000,000, 4% bonds
Construction expenditures incurred were as follows:
July 1, 2016 ........................ $400,000
September 30, 2016 ............... 600,000
November 30, 2016 ............... 600,000
January 30, 2017 ................... 540,000
The company's fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2016 and 2017.