Ameth Company constructed a building and incurred the following costs directly associated with construction. The building is valued at $$201,500($fair value$)$ upon completion.

Materials $$65,000$

Labor $104,000$

Incremental overhead $39,000$

Interest on construction loan incurred before completion $6,500$

Interest on construction loan incurred after completion $2,600$

Total $$217,100$

Prepare summary journal entries to record costs of $(1)$ construction and $(2)$ completion of the building. Assume that all qualifying interest during the current year is capitalized to the building.

Account Name Dr$.$ Cr$.$

$0$

$0$

Answer

Interest Expense

$6,500$

$0$

Answer

Cash

$0$

$214,500$

Answer

To record the costs of construction.

Construction in Process

$0$

$0$

Answer

Interest Expense

$2,600$

$0$

Answer

Building

$0$

$217,100$

Answer

To record the completion of the building.