In: Accounting
Hawkins Corporation began construction on a motel on March 31, 2018. The project was completed on April 30, 2019. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction periods:
$4,000,000 6% note
$16,000,000 10% bonds
Construction expenditures incurred were as follows:
March 31, 2018 $4,000,000
June 30, 2018 6,000,000
November 30, 2018 1,800,000
February 28, 2019 3,000,000
The company's fiscal year-end is December 31.
Calculate the amount of interest capitalized for 2018 and 2019.