Problem 7 (Chapter 10A) Capitalization of Borrowing Costs During 2017, Tibet Building Company constructed various assets at a total cost of $4.2…

Problem 7 (Chapter 10A) Capitalization of Borrowing CostsDuring 2017, Tibet Building Company constructed various assets at a total cost of $4.2 million. The weighted averageaccumulated expenditures on assets qualifying for capitalization of interest during 2017 were $2.8million. The company had the following debts outstanding at December 31, 2017:1. 8%, five-year note to finance construction of various assets,dated January 1, 2017, with interest payableannually on January 1:$1,800,0002. 10%, ten-year bonds issued at par on December 31, 2012, with interestpayable annually on December31:$2,000,0003. 7%, three-year note payable, dated January 1, 2016, with interest payable annually on January 1:$1,000,000Required:Calculate the amounts of the following for 2017 (show calculations):a) avoidable interest,b) total interest to be capitalized.  “Is this question part of your assignment? We Can Help!”

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