Pronghorn Furniture Company started construction of a combination office

Pronghorn Furniture Company started construction of a combination office and

warehouse building for its own use at an estimated cost of $4,972,800 on January 1, 2017. Pronghorn expected to complete the building by December 31, 2017. Pronghorn has the following debt obligations outstanding during the construction period.

Construction loan-10% interest, payable semiannually, issued December 31, 2016$2,019,500

Short-term loan-8% interest, payable monthly, and principal payable at maturity on May 30, 20181,605,600

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

Long-term loan-9% interest, payable on January 1 of each year. Principal payable on January 1, 20211,001,000

Assume that Pronghorn completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,192,000, and the weighted-average amount of accumulated expenditures was $3,827,600. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)