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On January 1, Sturdy Machines Inc. entered into a formal contract to construct a multipurpose warehouse for [tex]$15,000,000. To finance the construction project, the company immediately received an $[/tex]8,000,000 construction loan from a local bank that
included four [tex]$2,000,000 annual payments plus interest at 5%, with the remainder of the project financed with the company's general debt facilities at a 7% weighted average interest rate. Assuming average accumulated expenses were $[/tex]10,000,000 for
the year and that actual interest costs incurred on all related borrowings was [tex]$890,000, what is the amount of capitalized interest costs recorded by the company? A. $[/tex]500,000
B. [tex]$540,000. C. $[/tex]660,000
D. $890,000


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