Answer:
2018 $21,600
2019 $4,320
Explanation:
We need to work out average cost of borrowing as follows;
$2,000,000*8%+$8,000,000*4%=$480,000
$480,000/(2,000,000+8,000,000)=4.8%
July1, 2018 $400,000*4.8%*6/12=$9,600
Sept 30,2018 $600,000*4.8%*3/12=$7,200
Nov. 30, 2018 $600,000*4.8%* 2/12=$4,800
Total interest to be capitalized in December 31, 2018 =$21,600
Total interest to be capitalized in December 31 2018$540,000*4.8%*2/12=$4,320
