GrouperFurniture started construction of a combination office and warehouse building for its own use at an estimated cost of 4,440,000on January 1,...
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Grouper Furniture started construction of a combination office and

warehouse building for its own use at an estimated cost of €4,440,000 on January 1, 2022. Grouper expected to complete the building by December 31, 2022. Grouper has the following debt obligations outstanding during the construction period.


Construction loan-10% interest, payable semiannually, issued December 31, 2021 €1,820,000
Short-term loan-8% interest, payable monthly, and principal payable at maturity on May 30, 2023 1,456,000
Long-term loan-9% interest, payable on January 1 of each year. Principal payable on January 1, 2026 910,000


Assume that Grouper completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,732,000. The following expenditures were made during the period forthis project: January 1, €910,000; April 1, €1,310,000; July 1, €1,710,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and earned €20,400 of investment income. Compute the amount of borrowing costs to be capitalized for 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.)

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