Business, 05.05.2020 08:42 sbednarek

Ivanhoe Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $11,500,000 on January 1, 2020. Ivanhoe expected to complete the building by December 31, 2020. Ivanhoe has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2019 $4,600,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 3,220,000
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 2,300,000

Assume that Ivanhoe completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,197,700, and the weighted-average amount of accumulated expenditures was $3,781,600. Compute the avoidable interest on this project

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