Computing and Recording Interest Capitalization Bullock Company is constructing a building for its own use and has been capitalizing interest based on average expenditures on a quarterly basis since the project began last year. The following expenditures are made during the first quarter: January 1, $1,120,000; February 1, $1,020,000; and March 31, $1,460,000. Bullock had the following debts outstanding during this quarter Debt Amount Note payable, 10%, incurred specifically to finance construction $640,000 Short-term note payable, 15% 1,000,000 Mortgage note payable, 8% 480,000 Answer the following questions, rounding your answers to the nearest whole number. a. Compute interest to be capitalized and interest to be expensed for this first quarter. Amount of interest to be capitalized $ Amount of interest to expense $ Cr. b. Prepare the entry to record the construction expenditures and the interest. Note: Record the debit accounts in alphabetical order using the first letter of the account name. Account Name Dr. Construction in Process Interest Expense Cash and Payables 0