Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$2,000,000, 8% note
$8,000,000, 4% bonds
Construction expenditures incurred were as follows:
July 1, 2021 $ 400,000
September 30, 2021 600,000
November 30, 2021 600,000
January 30, 2022 540,000
The company’s fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2021 and 2022.