10 Problem 10-9 (Algo) Interest capitalization; specific interest method [LO10-7]On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. Thebuilding was completed on September 30, 2022. Expenditures on the project were as follows:January 1, 2021March 1, 2021June 30, 2021October 1, 2021January 31, 2022April 30, 2022August 31, 2022On January 1, 2021, the company obtained a $4,900,000 construction loan with a 12% interest rate. The loan was outstanding all of2021 and 2022. The company's other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with interestrates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. Thecompany's fiscal year-end is December 31.$2,020,0001,740,0001,940,0001,740,000441,000774,0001,071,000Required:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method.2. What is the total cost of the building?3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.Complete this question by entering your answers in the tabs below.Req 1 and 3Req 2What is the total cost of the building? (Do not round intermediate calculations.)Total cost of building< Req 1 and 3Req 2 > Problem 10-9 (Algo) Interest capitalization; specific interest method [LO10-7]On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. Thebuilding was completed on September 30, 2022. Expenditures on the project were as follows:January 1, 2021March 1, 2021June 30, 2021October 1, 2021January 31, 2022April 30, 2022August 31, 2022On January 1, 2021, the company obtained a $4,900,000 construction loan with a 12% interest rate. The loan was outstanding all of2021 and 2022. The company's other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with interestrates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. Thecompany's fiscal year-end is December 31.$2,020,0001,740,0001,940,0001,740,000Required:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method.2. What is the total cost of the building?3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.Req 1 and 3441,000774,0001,071,000Complete this question by entering your answers in the tabs below.Req 2Interest capitalizedInterest expenseCalculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method and interestexpense that will appear in the 2021 and 2022 income statements. (Do not round intermediate calculations.)20212022< Req 1 and 3Req 2 >

Under this method, the borrowings are specifically charged to the assets for which it has been…

On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $2,020,000 1,740,000 1,940,000 1,740,000 441,000 774,000 1,071,000 www On January 1, 2021, the company obtained a $4,900,000 construction loan with a 12% interest rate. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with intere ates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: . Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific interest method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.