Early in 2020, Cow Corporation engaged Bells, Inc. to design…
Early in 2020, Cow Corporation engaged Bells, Inc. to design and construct a complete modernization of Cow’s manufacturing facility. Construction was begun on April 1, 2020 and was completed on December 31, 2020. Cow made the following payments to Bells, Inc. during 2020: Date Payment 1-Apr-20 $2,950,000 31-Aug-20 2,940,000 31-Dec-20 3,600,000 In order to help finance the construction, Cow issued the following during 2020: $1,836,000 of 10-year, 8% bonds payable, issued at par on May 31, 2020, with interest payable annually on May 31. 400,000 shares of no-par common stock, issued at $9 per share on October 1, 2020. In addition to the 8% bonds payable, the only debt outstanding during 2020 was a $359,000, 10% note payable dated January 1, 2016 and due January 1, 2023, with interest payable annually on January 1. Compute the following. Round to the nearest dollar. Do NOT use a dollar sign in your answer. 1 Weighted-average accumulated expenditures qualifying for capitalization of interest cost $ 2 Avoidable interest incurred during 2020 $ 3 Total amount of interest cost to be capitalized during 2020 $