On 1 July 2010, entity A entered into a $3.0 million contract for the construction of a building . The building was completed at the end of June 2011. During the period, the following payments were made to the contractor:

Payment date                   Amount ($’000)

30 September 2010            600

31 March 2011          800

30 April 2011                1600

Total                                3,000

Entity A’s borrowings as at its year end of 30 June 2011 were as follows:

1. 10% four-year note with simple interest payable annually, which relates specifically to the project; debt outstanding at 30 June 2011 amounted to $600,000. Interest of $65,000 was incurred on these borrowings during the year.
2. 14.5% 10-year note with simple interest payable annually; debt outstanding at 1 July 2010 amounted to $1,000,000 and remained unchanged during the year.
3. 13% 10-year note with simple interest payable annually; debt outstanding at 1 July 2010 amounted to $2,500,000 and remained unchanged during the year.

Required: calculate the borrowing costs that can be capitalized