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Nash Company is constructing a building. Construction began on February 1 and was completed on December...

Nash Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $3,240,000 on March 1, $2,160,000 on June 1, and $5,400,000 on December 31.

Nash Company borrowed $1,800,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $3,600,000 note payable and an 11%, 4-year, $6,300,000 note payable. Compute avoidable interest for Nash Company. Use the weighted-average interest rate for interest capitalization purposes

Avoidable interest is: ?

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Compute Avoidable Interest? Answer: Weighted Average Interest Rate: Particulars Gross Amount Interest Computation Interest 12

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