D? Your answer is incorrect. Try again. Larkspur Company is constructino a build

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D? Your answer is incorrect. Try again. Larkspur Company is constructino a building,. Construction began on February 1 and was c completed on December 31. Expenditures were $%1,800,000 on March 1, $1,200,000 on e June 1, and $3,026,100 on December 31 Larkspur Company borrowed $1,15 a 996, 5-year, $2,017,300 note payable and an 10%, 4-year, $3,599,800 note payable. Compute avoidable interest for Lark for interest capitalization purposes. (Round percentages to 2 decimal places, e.g. 2.519% and final answer to o decimal places, e.g. 5,275., 9,000 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year the weighted average nterest rate spur Company. Us Avoidable interest Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts: 2 of 3 used SAVE FOR LATER SUBHIT ANSWER You have surpassed the number of attempts to earn Maximum Points for this question. For this attempt, and any subsequent attempt(s), you will earn points according to the Point search

Explanation / Answer

Calculation of Average Interest Cost Date Amount Int Month Avg borrowing Int cost 01-Mar 1590000 13% 10 1325000 172250 01-Jan 2017300 9% 12 2017300 181557 01-Jan 3599800 10% 12 3599800 359980 Total Interest Cost 6942100 713787 Avg Interest cost % = 713787/6942100*100 = 10.28% Calculation of Average Expenditure 01-Mar 1800000 10 1500000 01-Jun 1200000 7 700000 31-Dec 3026100 0 0 2200000 Avoidable Interest = 2200000* 10.28% 226160

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