On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021(Hint: use Weighted-average rate of these two other debts):
$5,000,000, 12% bonds
$3,000,000, 8% long-term note
Construction expenditures incurred during 2021 were as follows:
January 1 $ 600,000 March 31 1,200,000 June 30 800,000 September 30 600,000 December 31 400,000