Can someone please explain this to me? It has all the right answers already I just don't know what they're doing.

Rules: 1. Interest can only be capitalized on building costs incurred during the construction period 2. If the company takes a construction loan for this project, and this is the only loan for the company, the interest rate for the construction loan will be used to capitalize interest. Example 1 $100,000 W.A.A.E Construction loan 200,000 @ 10% Date Account Debit Credit Building Interest Expense 10,000 10,000 Cash 20,000 Example 2 W.A.A.E Construction loan 300,000 200,000 @ 10% Date Account Building Cash Debit Credit 20,000 20,000