A building was constructed on land purchased last year at a cost of $315,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date Payment 2/1 $252,000 6/1 756,000 9/1 1,008,000 11/1 210,000 To finance construction of the building, a $1,260,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $420,000 of other outstanding debt during the year at a borrowing rate of 8%. Record the acquisition of each of these assets

This is my journal:

Land 315,000 Buildings 2,231,460

Cash 2,541,000 Interest Expense 5,460

The amount of Land and Cash was right.

I got Interest Expense as below:

315,000 *9/12 236,250 WAAE is 236,250+189,000+315,000+168,000=908,250 252,000 *9/12 189,000 756,000 *5/12 315,000 1,008,000*2/12 168,000 210,000*0 0

Specific construction loan:1,260,000*0.12=151,200 Remaining debt 420,000*0.08=33,600

1,260,000-908,250=351,750

1,260,000*0.12=151,200 351,750*0.08=28,140 151,200-28,140=179,340(avoidable interest)

Acutal interest 151,200+33,600(420,00*0.08)=184,800

184,800-179,340=5,460

I don't know why my Interest Expense is wrong.

Would you help me, please?

Thanks!