Question

Can you please solve this problem. The correct answer that should be found is below. Thank You

Early in 2015, Logan Corporation engaged Reese, Inc. to design and construct a complete modernization of Logan's manufacturing facility. Construction was begun on January 1, 2015 and was completed on December 31, 2015. Logan made the following payments to Reese, Inc. during 2015:

Date	Payment
June 1, 2015	$2,400,000
August 31, 2015	3,600,000
December 31, 2015	3,000,000

In order to help finance the construction, Logan issued $2,000,000 of 10-year, 9% bonds payable, issued at par on January 2, 2015, with interest payable annually on December 31.

In addition to the 9% bonds payable, the only debt outstanding during 2015 was a $500,000, 12% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1 and a $1,000,000, 10% bond payable dated July 1, 2011 due June 30, 2021 with interest paid annually.

Compute the interest to be capitalized in 2015. Logan uses the specific interest method. Show computations. The correct answer should be $244,200

Answer 1