On January 2, 2010, Indian River Groves began construction of a new citrus proce

Question

On January 2, 2010, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2011. Expenditures for the construction were as follows:


January 2, 2010 $200,000
September 1, 2010 600,000
December 31, 2010 600,000
March 31, 2011 600,000
September 30, 2011 400,000


Indian River Groves borrowed $1,100,000 on a construction loan at 12% interest on January 2, 2010. This loan was outstanding during the construction period. The company also had $4,000,000 in 9% bonds outstanding in 2010 and 2011.
The interest capitalized for 2010 was:


$192,000


$60,000


$180,000


$48,000

Explanation / Answer

The interest capitalized for 2010 was:


$192,000


$60,000


$180,000

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